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Soybeans fall hard

Updated: 10/19/2011 @ 2:30pm

DES MOINES, Iowa (Agriculture.com)--With the soy complex taking the biggest hit, the CME Group farm markets closed lower across the board Wednesday. 

The Dec. corn futures settled 5 1/2 cents lower at $6.38 1/2. The Nov. soybean contract closed 25 3/4 cents lower at $12.25. The Dec. wheat futures ended 5 3/4 cents lower at $6.19 1/2. The Dec. soymeal futures closed $5.00 per short ton lower at $319.30. The Dec. soyoil futures ended $1.22 lower at $51.48.

In the outside markets, the NYMEX crude oil is $2.32 per barrel lower, the dollar is lower and the Dow Jones Industrials are down 60 points.

Matt Connelly, an independent CME Group floor trader, says the market is dealing with a lot of uncertainty. "Nearby spreads are still strong cz/ch, sx/sf. I'm hearing farmers will wait until January to sell aggressively. Plus, I still think USDA can lower yields in Nov. to 145-147 bu./acre for corn, 40-41 bu,/acre for soybeans. And, the trade is still nervous about EU situation," Connelly says.
Hedge funds, for the most part, are down on the year and probably will wait until January to jump into farm markets, he says. 

"The corn and bean volatility is coming down, corn under 30% straddle is 50 cents. Bean volatility is around 21%(Jan) straddle is 87 cents.  The markets will most likely trade range bound, unless we get a surprise in the Nov. report," Connelly says.

Scott Shellady, ICAP Energy grain trader, says the grain complex is a mixed bag. "There continues to be some aggressive selling in terms of option volatility this morning in the corn pit." 

"Some floor traders were expecting some support in volatility here. But, paper continues to offer 'at the money' straddles and 'in the money' puts. Today, it is the 'put' selling by paper that is driving volatility lower, as locals continue to back off bids," Shellady says. 

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dumb 10/19/2011 @ 11:32pm It's so great that you all keep knocking down our prices,our yields are way down and crop input prices for next year are way on the rise but don't worry as farmers we can always get 2nd and 3rd jobs so other people in the middle can keep their high priced lifestyle intact.

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