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Grains trimmed, still a higher close

05/26/2011 @ 9:41am

CHICAGO, Illinois (Agriculture.com)--Despite a late-day profit-taking session, the CME Group grain and soybean markets were able to close higher Thursday.

The July corn futures settled 3 1/4 cents higher at $7.45 1/2. The July soybean contract closed 7 3/4 cents higher at $13.84 3/4. The July wheat futures settled 18 cents higher at $8.14 1/2. The July soybean meal futures settled $2.00 per short ton higher at $360.30. July soyoil ended $0.66 higher at $58.62.

In the outside markets, the NYMEX crude oil is $1.13 per barrel lower, the dollar is lower and the Dow Jones Industrials are down 39 points.

Joe Bedore, FC Stone Inc.'s CME Group grain floor manager, says European wheat weather and poor U.S. planting conditions are underpinning the market's rally.

"There are rumors flying around that Ohio farmers have gotten no planting done this week. Parts of southern Illinois and Indiana have had crop-weather troubles. So, that is part of why this market is rallying," Bedore says.

Perhaps the biggest driver of the higher market is the European wheat weather, Bedore says. "Europe's crop is dry. China's wheat crop is dry too. Canada's wheat crop is too wet. So, this world wheat-weather picture is driving wheat higher."

The soybean market is getting strength from a statement by Goldman Sachs, a well-respected market participant, that soybeans are currently underpriced, suggesting to traders that's the market to go 'long' in, he says.

Going forward, watch for Monday night's weather forecast. "If we have a 6-10 day weather outlook that shows 90-degree and dry days, the corn market could get hit by pressure," Bedore says.

Memorial Day positioning

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