Wheat, corn ride rally
Agriculture.com--Continued flooding in Australia supported a CME Group wheat rally that extended to the corn market Tuesday.
The March corn futures settled 10 3/4 cents higher at $6.59 1/2. The March soybean contract closed 9 1/4 cents lower at $14.13 1/4. The March wheat futures ended 20 1/4 cents higher at $7.93 1/4. March soybean meal futures closed $4.70 lower per short ton at $383.50. The March soyoil futures settled $0.28 higher at $57.55.
In the outside markets, the NYMEX crude oil is $0.26 per barrel lower, the dollar is lower, and the Dow Jones Industrials are up 61 points.
Tim Hannagan, PFGBest.com senior grain analyst, says wheat is driving today's rally.
"We saw better-than-expected rain, over the weekend, in Argentina.This had beans down on the overnight and day session. It capped corn trade overnight. But, corn followed more bullish wheat news. Australia, over the weekend, stated the recent flooding continues," Hannagan says.
Today, there is talk of Australian shipping rails underwater, with potential rail shipping delays of wheat up to 3 months, Hannagan says. "This all but eliminates Australia as a wheat supplier, before U.S. Canadian and European crops start to see their harvest entering in May. The wheat news could be a one-day flash, with potential for 'turnaround' Tuesday."
Meanwhile, with less-than-needed rain falling in Argentina's drought-stricken crop areas, the market remains concerned about that country's growing season.
"The Argentine crop estimate is lower by 5 to 7 million metric tons, and that idea has not changed," one CME Group floor trader, choosing to remain anonymous says. "The area of concern has diminished and rain is still in the forecast for the coming week. So, I think we are standing pat on current crop estimates."
He adds, "Though I am a little bearish at the moment, balance sheets remain tight enough for both corn and beans that U.S. planting intentions and spring weather will dictate price."
Though the Chinese import margin for U.S. corn does not compute, a corn price of $5.40 futures could set that country up for imports.
"If the Chinese gov't wants to build a cushion of stocks at non- economic prices, as happened in 1995/96, then they could begin importing U.S. corn," he says.