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Soybeans close sharply higher

Updated: 01/17/2012 @ 1:31pm

DES MOINES, Iowa (Agriculture.com)--With China reporting a better-than-expected fourth quarter GDP rate and favorable outside markets the CME Group soybean prices ended sharply higher Tuesday.

The March corn futures settled 4 1/4 cents higher at $6.04. The March soybean contract closed 25 1/4 cents higher at $11.83 1/2. The March wheat futures finished 2 1/2 cents higher at $6.04 3/4. The March soymeal futures closed $9.00 per short ton higher at $310.50. The March soyoil futures ended $0.48 higher at $50.77.
In the outside markets, the NYMEX crude oil is $1.68 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 99 points.

Matt Connelly, independent CME Group floor trader, says the soybean pit is pulling all grains forward.

"Clearly, soybeans are the leader. Good export inspections (China last week). Corn and wheat have fizzled out. South American weather still a concern, although for corn the damage has been done. Beans still need weather premium. Outside market influence also helping, especially the weakness in the dollar."

Tim Hannagan, PFGBest.com senior grain analyst, says weather is being traded with assistance from outside markets. 

"The grain prices broke late Friday, as weather reports increased expected rains in South America," Hannagan says. But, the trade added weather premium back in last night and today, as weekend rains were less-than-expected. In addition, a drier forecast into Friday has been released for drought-stricken areas of Argentina."

Capping gains is talk of rain in Argentina for this weekend, he says.

"This could lead to lower prices Wednesday. But, should the Argentine weather picture dry up, we're poised to fill some of the gap left from last week's crop report," Hannagan says.

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