Soybeans close 50¢ higher
DES MOINES, Iowa (Agriculture.com)--A hot/dry weather outlook helped the CME Group corn and soybean prices close sharply higher Tuesday.
The July corn futures settled 12 1/2 cents higher at $6.12, while the Dec. contract finished 29 cents higher at $5.63. The July soybean contract closed 50 1/4 cents higher $14.34, while the Nov. 2012 contract settled 46 3/4 cents higher at $13.86. The July wheat futures finished 17 1/4 cents higher at $6.47 1/2. July soyoil futures ended $1.69 higher at $50.45. The July soymeal futures settled $14.80 higher at $427.70.
In the outside markets, the NYMEX crude oil is $0.98 per barrel higher, the dollar is lower and the Dow Jones Industrials are 103 points higher.
Matt Connelly, an independent CME Group floor trader, says the corn market has strong upside. "The market is trading all weather, in corn. Yield guesses now 158 corn vs. the USDA's 166 bushels per acre, with 42.5 bu./acre bean yields. I think we are just getting started. There is no length in the corn market," Connelly says.
Jack Scoville, PRICE Futures Group vice president, agrees that it's a weather market. "The crop report, last night, brought this home to people. Also, the G-8 is talking about global growth stimulus, and I think people expect a lot more money to hit the market in the short term to create conditions for global growth to happen. I am not convinced they are right, but we will see.
Specs are buying everything today, Scoville says.
"Remember how beat up these markets have been and keep this huge move in some perspective. It is a big move, but as beaten up as this market had been, you had to think a big move was coming," Scoville says.
The soybean market is finding some producer and spec-selling against contract highs, the analyst says.
"Corn bulls will get more help with a close above $5.50, basis the Dec. contract. That would imply a return to something in the $5.90-$6.00 Dec area. We are starting to lose bushels and that is what is helping as much as anything today," Scoville says.