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Pre-holiday trades sink markets

09/01/2011 @ 9:40am

DES MOINES, Iowa (Agriculture.com)--Positioning ahead of the Labor Day Holiday struck the CME Group grain and soybean prices Thursday, traders say.

At the close, the Dec. corn futures settled 29 cents lower at $7.38 1/2. The Nov. soybean contract closed 23 cents lower at $14.34 1/4. The Dec. wheat futures ended 30 1/2 cents lower at $7.61. The Dec. soymeal futures closed $4.30 per short ton lower at $383.50. The Dec. soyoil futures closed $0.84 lower at $58.23.

In the outside markets, the NYMEX crude oil is $0.28 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 92 points.

Tom White, FutureRoad.net analyst and CME Group corn pit trader, says pre-holiday trading kicked in Thursday.

"I think that's exactly what was going on today. The long holiday ahead sparked selling. We could probably see more coming tomorrow. But, corrections are healthy and can create new buying," White says.

Tom Barry, A Linn Group wheat options trader on the CME Group trading floor, says that thoughts of just how far past the $8.00 level in the Dec. wheat futures can go have been replaced with just how far in the direction of $7.00 the Dec. futures can go.  

"All in the span of a couple of sessions, the general tone has gone from protecting your 'call' slope to watching your short 'puts' below the 700 strike," Barry says.

Barry adds, "Thursday's early slow burn lower was transformed into a deliberate dismantling that seemed to accelerate into the close to leave wheat futures down over 30 cents on the day along with near limit-down corn as we head into the last day ahead of the long weekend."

Tim Hannagan, PFGBest.com senior grain analyst, says the lower market is a reflection of typical trading ahead of a three day holiday closing. "The Export Sales Report, this morning, was bearish giving us a lower opening. But, as always, there were buyers on the break pulling us off lows. But, don’t expect any rallies to hold, as traders will wait to buy when they return next week."

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