Grains stay afloat in early trading
The grains started off on a bullish note Wednesday morning, riding Tuesday's strength and a mostly higher stock trade after a two-day break on account of Hurricane Sandy.
In early trading, the December corn futures contract was 5 3/4 cents higher at $7.47 1/2 while December wheat was 6 1/4 higher at $8.63. November soybeans were 3 cents higher at $15.39 1/2. Those gains come as the Dow Jones Industrial Average floats 10 points higher at 13,124, while the S&P 500 sits 1/4 point higher at 1,418.25. The NASDAQ is the lone equities market in the red, and just barely, at 18 points lower.
Will the higher prices last? "Still a very weird feeling around the trading floors this morning here in Chicago. Finally getting the whole world opened up and getting a little bit of normal back in our daily lives. Stocks opening higher. End of month, so keep an eye out for any crazy stuff," says Trean Group options specialist and trader and Agriculture.com market analyst Scott Shellady. "Oil up. Gold up. Euro is up. Everyone happy to be trading again, and it's reflected in the price board this morning. I don't think it will last long."
But don't look for an eventual dip in the equities to totally drag the grains under with them, Shellady adds. The talk of strong global demand for U.S. corn and soybeans continues in the CME Group pits Wednesday, and that's likely enough to open up some breathing room and keep the grains out of the red.
"I don't think equities finish higher... they have already sold off," he says. "The grains should stay higher on demand stories doing the rounds, and end-of-month funds will keep a strong market stronger to mark the books."