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Profit-taking sinks corn, soybeans

Updated: 11/27/2013 @ 1:54pm

DES MOINES, Iowa (Agriculture.com--After a nice rally to start the session, the CME Group soymeal price started the fall in prices taking a stronger soybean market with it Wednesday.

The Dec. corn futures contract closed 1 1/4 cents lower at $4.17. The Jan. soybean futures contract finished 9 1/4 cents lower at $13.20. Dec. wheat futures ended 4 3/4 cents higher at $6.51 per bushel. The Jan. soymeal futures contract ended $4.30 per short ton lower at $445.90. The Dec. soyoil futures finished $0.35 lower at $40.00.

In the outside markets, the NYMEX crude oil is $1.60 per barrel lower, the dollar is lower and the Dow Jones Industrials are 20 points higher.Dustin Johnson, eHedger grain analyst, says a short squeeze in December meal helped bring beans up to a new high for the move.  

"But, when meal finally broke today, beans had to follow. Also, $13.40 was a large technical target price reached in the January bean contract and that helped fuel the reversal," Johnson says.

Meanwhile, as the month of December approaches, price recovery is not seen anytime soon, Johnson says.

"I don't think we will see a post-Thanksgiving day market rally this year.  Soybeans have already had a significant rally and at the same time we are starting to see cargo cancellations from China."

For corn, the market is having a hard time rallying because of crop size, he says.  "Unless we start to see weather problems in South America I would say beans are overcooked and corn wont break out of their long term bearish trend just yet."

Mike North, First Capitol Ag Risk Advisor, says that although historically the grain markets perform well before Thanksgiving, this year offers a few different twists.  

"First, today is technically considered month-end, as most traders will be taking the four-day weekend.  That leaves room for profit taking in the soybeans (lower bias).  The other twist is First Notice Day in the December grains.  This will likely continue to tighten the spread between December and March going through the holiday," North says.  

Once through the holiday, demand discussions will dominate the marketplace, North says.  

"If soybean exports take the spotlight, beans have a chance to run back toward their fall highs.  However, that is the death kiss for the market headed deeper into winter as each tick higher grabs even more ground for planting in South America."

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