Corn closes higher, soybeans lower
DES MOINES, Iowa (Agriculture.com)--The CME Group soybean market retracted from a higher start, due to better Midwest rain chances and profit-taking. Corn finished off its daily highs, but still stronger Wednesday.
The July corn futures settled 6 1/2 cents higher at $6.52 1/2, while the Dec. contract closed 9 3/4 cents higher at $6.33 3/4. The July soybean contract finished 1/2 of a cent lower $14.70, while the Nov. 2012 contract ended 1 1/4 cents lower at $14.12. The July wheat futures settled 3 cents higher at $7.32. July soyoil futures closed $0.54 higher at $51.42. The July soymeal futures finished $2.70 higher at $429.90.
In the outside markets, the NYMEX crude oil is $0.78 per barrel higher, the dollar is higher and the Dow Jones Industrials are 80 points higher.
Tim Hannagan, PFGBest.com senior grain analyst, says last night's weather updates started drying up, regarding next week's rain chances and added heat.
"Beans are struggling at $14.39, as it's been the high each day this week. The soybean plants are not in the key pod-setting stage, so the trade is being less aggressive ahead of what is perceived to be a bearish acreage report Friday," Hannagan says.
After the report, there's a lot of pent up weather premium to add to beans, he says.
Corn is entering key yield time. And, conditions are called warmer and drier-than-normal into July 11. Remember, corn is undervalued from last year, when we had a higher ending stocks yet hit $7.99. This year, stocks are smaller and we're $1.50 lower. The perception is we will see increased acres in Friday's report, will add to inventories. But, the drought is having the final word," Hannagan says.
Meanwhile, a CME Group floor trader, requesting anonymity, says the current rally involves weather and traders with December 'short' positions that are getting squeezed out of their positions with a hot/dry forecast that is getting hotter and drier.
"Expected precipitation from Tropical Debby did not move far enough inland as expected," the trader says. Also, corn managed, prior to rally, had liquidated most of their 'long' positions. So, there is no selling pressure. In addition, the trade is thinking the U.S. corn yield average is now below 155 bu./acre vs. the USDA's 166 bu./acre," the trader says.