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Wheat rallies, soybeans follow

Updated: 08/29/2012 @ 2:34pm

DES MOINES, Iowa (Agriculture.com)--Talk of Russia banning grain, smaller U.S. crop estimates, and increased demand combined to rally the corn, soybean and wheat markets Wednesday.

The Dec. futures corn contract closed 18 cents higher at $8.13 1/4. The Nov. soybean contract finished 30 3/4 cents higher at $17.53. Dec. wheat futures finished 30 1/4 cents higher at $9.05 3/4 per bushel. The Dec. soyoil futures contract settled $0.91 higher at $57.30. The Dec. soymeal futures contract finished $8.20 per short ton higher at $530.00. 

In the outside markets, the NYMEX crude oil is $0.70 per barrel lower, the dollar is higher and the Dow Jones Industrials are 21 points higher.

Jack Scoville, PRICE Futures Group vice president, says wheat is leading on the Russian grain ban talk. 

"I suspect it (Russia) will increase taxes, but I think after joining the WTO it would be reluctant to ban outright. Plus, the potential Saudi demand from the tender they announced today is bullish for wheat. Beans are up on China demand talk and expectations for a strong weekly report tomorrow. And, corn kind of is going along for the ride," Scoville says.

Tim Hannagan, Alpari (U.S.) LLC senior grain analyst, says that corn, beans and wheat were all sitting just off lows of the day, when a private crop forecaster released a yield estimate that was perceived very bullish.

"This triggered short covering and new buying. December corn was sitting at $7.96 and 30 seconds later $8.06. Good example, as to how nervous grains are over the drought situation," Hannagan says.  

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