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Corn, soybeans settle higher

03/05/2013 @ 9:37am

DES MOINES, Iowa (Agriculture--Though off its daily high, the CME Group soybean market helped all other commodities finish higher Tuesday.

The May futures corn contract closed 5 cents higher at $7.09. The May soybean futures contract ended 4 cents higher at $14.66. May wheat futures ended 3 cents higher at $7.06 per bushel. The May soyoil futures contract settled $0.13 lower at $50.13. The May soymeal futures finished $2.20 per short ton higher at $435.90. 

In the outside markets, the NYMEX crude oil is $0.63 per barrel higher, the dollar is lower and the Dow Jones Industrials are 138 points higher.

Jack Scoville, PRICE Futures Group vice president, says the soybeans reacted the 650,000 tons of U.S. soybean sale confirmed today.  

"I think we now know why beans rallied so much yesterday, too.  It is Brazil and the logistics.  I think I saw today that it (Brazil) exported like 900,000 tons of soybeans in February, from 1.6 million last year," Scoville says.

The U.S. does not have that much to sell. "Therefore, flat price and spreads were well supported today.  Corn and wheat are along for the ride," Scoville says. 

Meanwhile, prices should hold firm today, he says. "I think spreads will be a big feature moving forward, as flat price is already pretty high," Scoville adds.

Tim Hannagan, Alpari (U.S.) LLC senior grain analyst, says the markets are feeding off of the huge soybean demand.

"As long as China keeps buying US beans for near term shipment off Brazilian port shipping delays, fund psychology is the price has to move high enough to shut off demand and ration our historically tight US beans stocks," Hannagan says. 

With corn, there are ports worldwide to buy corn at any price but exportable beans are only found in the US and South America, he says. 

"Watch the daily demand releases closely as any shift to or away from US ports will give us a sharp rally or break near-term. The long-term into March and in early April looks to be supply side priced and futures bearish," Hannagan says.

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