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Corn closes sharply higher

Updated: 06/28/2011 @ 1:39pm

CHICAGO, Illinois (Agriculture.com)--A grain rally went bell-to-bell Tuesday. The CME Group grain and soybean markets utilized support from a drop in crop ratings to settle higher.

The Dec. corn futures settled 26 1/4 cents higher at $6.53. The Nov. soybean contract settled 4 cents higher at $13.19. The Sep. wheat futures ended 21 cents higher at $6.71 3/4. The Dec. soybean meal futures contract closed $0.80 per short ton lower at $338.70 and Dec. soyoil futures closed $0.39 higher at $56.59.

In the outside markets, the NYMEX crude oil is $1.97 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 105 points.

Joe Bedore, FC Stone's CME Group trading floor manager, says the government's weekly weaker crop ratings are providing support today. "Plus, there continues to be talk that China is interested in buying more U.S. corn. And, we're seeing traders get ready for Thursday's USDA Reports," Bedore says.

Yet another floor trader, requesting anonymity, says that he is unimpressed with the market's reaction to declining crop ratings. "Any other time, that kind of a drop in ratings would push this market to limit levels. But, with 30% of Greece's banks in question and all of the world's nervousness about economic conditions, there continues to be this risk-off mentality out there," he says.

The big trading companies have gotten smaller, through the latest risk-off mentality, he says. "The people that trade these markets, here, have gotten run over. And nobody wants to talk about the bullish ideas that the U.S. could be sitting on tight stocks, Brazil's corn crop just had a frost, the U.S. corn crop is 10-12 days late in its growth, and the government will have a hard time finding more acres this year, with the heavy rains and river floorings."

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