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Liquidation pressures soybeans

09/14/2011 @ 9:37am

DES MOINES, Iowa (Agriculture.com)--Liquidation pushed the CME Group soybean futures contracts lower Wednesday, while corn and wheat settled slightly higher.

At the close, the Dec. corn futures settled 1 1/4 cents higher at $7.24 1/4. The Nov. soybean contract settled 9 cents lower at $13.82 3/4. The Dec. wheat futures closed 2 1/2 cents higher at $7.04 1/2. The Dec. soymeal futures closed $0.70 per short ton higher at $363.40. The Dec. soyoil futures settled $0.53 lower at $57.10.

In the outside markets, the NYMEX crude oil is $1.45 per barrel lower, the dollar is lower and the Dow Jones Industrials are up 188 points.

Terry Roggensack, The Hightower Report, says the markets have really struggled in recent weeks for a lot of reasons. 

"There's a lot of talk that outside markets are turning negative, with the stock market expected to fall apart and signs of weakness in the energy markets. But, today those theories are not ringing true," Roggensack says.

The stock market rallied at the close of the grain market. Plus, even though there is a lot of talk of a Thursday frost damaging 30 million bushels of soybeans and 130 million bushels of corn, the markets haven't responded, he says. 

In fact, soybeans have dropped 87 cents off of the August peak, and moving lower. "That certainly is not a positive sign. Plus, we have big speculators holding big net 'long' positions in corn and soybeans. And, we're seeing a lot of liquidation. Yesterday, corn was hit with liquidation and soybeans today," Roggensack says.

People are just moving to the sidelines. They (investors) are getting out of the grain markets and not really going into other sectors, he says.

Other negative factors include a lower-than-expected soybean crush number released Wednesday. Paraguay announced its 2011-12 soybean production is estimated at a record 9.0 million metric tons. A 160,000 metric ton soybean sale to China Wednesday couldn't even support the falling soybean market. 

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