Wheat, soy prices end strong
CHICAGO, Illinois (Agriculture.com)--The CME Group wheat and soybean markets closed sharply higher Tuesday. However, new Brazilian crop estimates appear bearish.
The May corn futures settled 3/4 of a cent higher at $6.71 3/4. The May soybean contract closed 13 cents higher at $13.61 1/2. The May wheat futures ended 12 cents higher at $7.37 1/4. The May soybean meal futures settled $0.50 per short ton higher at $358.60. The July soyoil futures settled $0.49 higher at $57.02.
In the outside markets, the NYMEX crude oil is $0.76 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 81 points.
Luisa Longo, a CME Group floor trader says positioning moved the markets Tuesday. "With no fresh news out this morning, I think this is all positioning before Thursday's big acreage report for soybeans and wheat. There is some short covering and maybe even some bargain hunting. Corn continues to see fund liquidation as no new corn sales were reported."
Meanwhile, new Brazilian crop production estimates from Gazeta do Povo, a Brazilian newspaper that conducts a nationwide Crop Expedition, have a bearish tone to them.
For Mato Grosso, a soybean crop size of 19.53 million metric tons is expected. If realized, that would be a 3.9% increase vs. a year ago. As of last week, over 80% of the crop was harvested.
"Despite of all the rains, there were no significant losses there," Luana Gomes, a Gazeta do Povo reporter told Agriculture.com. Even taking into account the high moisture grains that will need to be dried out before hitting the market, average yields are pretty good in Mato Grosso."
For Parana state, the Crop Expedition figures were 14.57 mmt of soybean (+5.1% over last year) and 5.52 mmt of summer corn (-18.5%).
With over 70% of the soybeans harvested, Parana’s situation is similar to Mato Grosso’s, Gomes says. "High moisture grains and isolated crop problems due to excessive rains during harvest time, but no significant yield losses."
With 45% of the first crop corn harvested, average yields are also pretty good in the state, as corn can take the excessive rains better that the soybeans, she says. "The crop is smaller than last year’s because there was a large acreage reduction (-20.1%), due to lower planting season prices (final quarter of 2010)," Gomes says.