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Old contracts finish up

06/05/2013 @ 9:10am

DES MOINES, Iowa (Agriculture.com)--The CME Group soybean market has jumped higher, while corn and wheat remain mostly lower Wednesday. 

The July futures corn contract settled 1 cent higher at $6.60. New-crop Dec. futures finished 11 cents lower at $5.42. The July soybean futures contract finished 3 cents higher at $15.32, new-crop Nov. soybeans ended 16 cents lower at $13.00. July wheat futures finished 7 cents lower at $7.01 per bushel. The July soymeal futures closed $3.40 per short ton higher at $455.90. The July soyoil futures settled $0.29 lower at $48.30.
In the outside markets, the NYMEX crude oil is $0.66 per barrel higher, the dollar is higher and the Dow Jones Industrials are 210 points lower.

Alan Brugler, Brugler Marketing & Management LLC, says the soybean market jumped on a 'short' position squeeze potential in the July contract. "The traders that are short are not getting the expected weakness ahead of the UBS and Goldman roll, shorts getting nervous.  Crushers are paying up for the cash beans. We are still looking at a couple million ton shortfall in meal production for the second half of the year vs. last year," Brugler says.

For corn, solid ethanol demand (biggest weekly grind since June 2012) is supportive to old crop corn, Brugler says. 

The new-crop corn contract is pressured by more U.S. corn acres getting planted, despite the wet weather. "New crop did see some selling tied to the 91% planting progress and ideas that another 2 million acres or more would be planted this week," Brugler wrote in Barchart commentary.

Though the USDA will release its monthly supply/demand numbers, the trade is already shifting its focus to the June 28 Acreage and Grain Stocks Report, Brugler says. "June 1 corn stocks have been above the average trade guess in four of the last eight year. So, it is high risk for both bulls and bears," Brugler wrote.

According to EIA data, ethanol production averaged 885,000 barrels per day (b/d) — or 37.17 million gallons daily. That is up 22,000 b/d from the week before and the highest average in almost one year (highest since the week ending 6/15/2012). The four-week average for ethanol production stood at 870,000 b/d for an annualized rate of 13.34 billion gallons, the Renewable Fuels Association reported Wednesday.

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Soybeans Rally on Demand, Weather