Grains swallowed by DJIA
CHICAGO, Illinois (Agriculture.com)--As the Dow Jones Industrial Average dropped by as much as 500 points, the U.S. and world financial problems pulled every farm market sharply lower Monday.
The Dec. corn futures closed 17 cents lower at $6.86. The Nov. soybean contract settled 24 1/2 cents lower at $13.11 1/2. The Sep. wheat futures ended 22 1/2 cents lower at $6.56 1/2. The Dec. soybean meal futures contract settled $6.00 per short ton lower at $346.50 and Dec. soyoil futures settled $1.11 lower at $54.44.
In the outside markets, the NYMEX crude oil is $5.62 per barrel lower, the dollar is higher and the Dow Jones Industrials are down 343 points.
Jack Scoville, PRICE Futures Group vice-president, says the U.S. debt downgrade is playing a part in lower farm markets. "It has created more of a risk-off mentality, as Europe now seems to be more of an issue. Will there be a Europe much longer? All sorts of questions like that running around," he says.
Plus, the debt downgrade threatens to raise interest rates and the cost of doing business which could hurt demand, he says.
In addition, improved U.S. weather is applying pressure to the grain prices, Scoville says.
"We got much more normal temps and some showers every few days. That is hurting the beans especially. I think we are making a low today or tomorrow, as I expect shorts to cover before the reports on Thursday. There is talk that crop ratings will be down today. So, today might be a low."