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Soybean prices close higher

Updated: 03/30/2011 @ 1:30pm

CHICAGO, Illinois (Agriculture.com)--The CME Group soybean market, supported by trader-spreading, closed higher Wednesday.

The May corn futures settled 8 1/2 cents lower at $6.63 1/4. The May soybean contract closed 10 1/2 cents higher at $13.72. The May wheat futures ended 10 cents lower at $7.27 1/4. The May soybean meal futures settled $2.10 per short ton higher at $360.70. The May soyoil futures settled $0.30 higher at $57.32.

In the outside markets, the NYMEX crude oil is $0.50 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 83 points.

One CME Group floor trader, requesting anonymity, says the market is selling the May corn and buying the May soybean futures. But, this is being misinterpreted, he says. "If you look at what July/Nov bean spread has done, it gave up a lot of ground. In recent days, it went from being $1.20 over to just $0.17 over. So, this is short-covering today and it's helping the May prices stay higher. This is keeping soybeans supported, when there is no new news for beans."

Ultimately though, beans have a problem, price-wise, he says. "Argentina is trying to expand its harvest this year. They have better crops than we earlier thought. Brazil is supposedly going to have a 72.7 million metric ton soybean crop, according to a newswire report," he says. 

With a weak U.S. soybean basis, and rumors of Asian buyers asking to roll 'basis' forward, this puts further pressure, long-term, on the bean market, he says. 

"In addition, there's a negative crush margin in China right now. So, there is no big bid here for soybeans. With South America's harvest coming on, the timing of bearish bean news couldn't be worse."

Meanwhile, other traders see a lot of positioning occurring, ahead of tomorrow's USDA Planting Intentions Report.

The trade looks to chop on either side of unchanged, Matt Pierce, a CME Group floor trader and market analyst for GrainAnalyst.com, says.

"The 'outside' markets are offering mild negative momentum that may build up to small liquidation in grain prices today," Pierce says. Don't get overly excited about any downdraft that may occur with continued liquidation expected as the world uncertainty continues."

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