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Profit-taking dooms grains to lower close

Jeff Caldwell 08/16/2013 @ 2:59pm Multimedia Editor for Agriculture.com and Successful Farming magazine.

After a sharply higher day on Thursday, profit-taking hit the grains on Friday, sending corn, soybean and wheat futures to lower closing prices to end the week.

At the close, the December corn futures contract was 8 3/4 cents lower at $4.63 1/2, while November soybeans were 6 1/4 lower at $12.59 1/4 and December wheat was 6 lower at $6.43 1/2.

Traders took advantage of the double-digit rally in corn and soybean futures on Thursday, taking profits from a market that's starting to focus more sharply on crop weather moving forward, analysts say. Though prices slid downhill toward Friday's close, that won't necessarily be the tone when trading resumes on Sunday night, market-watchers say. Mother Nature will determine how the trade starts out next week, says Cargill senior grain merchandiser in Eddyville, Iowa, Ray Jenkins, especially after a few days of trading that ultimately saw difficulty in establishing a trading trend one way or another.

"The market appeared to view a 25+ cent rally as 'too much, too quickly' and decided to take 8-9 cents off corn futures going into another pivotal weather weekend," Jenkins says. "Let’s see what Sunday night markets hold in store for us. The prevailing thought right now is that we are losing some yield potential in the dry areas, and we have gone from an early week '14 billion is in the bin' attitude to something less. We have the potential to save some yield with a decent rain, but right now that is not in the cards."

Farmers are just as anxious about the weather in the next few days, especially heading into next week, when temperatures are expected to rise. That also makes it critical that rain falls, says Agriculture.com Marketing Talk frequent contributor DKIL.

"Boy, we could sure use a rain in northern Illinois as well as many areas.  From the road, it is not showing stress because temps are so cool. That will change some by the weekend and next week," he says. "It will be interesting to see how fast it changes. We know that July rain makes corn and being behind that stretches into mid-August. With less than a 1/3 of normal rain since July 1, tipback is happening and will continue fast."

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