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Soybeans close sharply higher

05/10/2012 @ 9:36am

DES MOINES, Iowa (Agriculture.com)--A USDA Report that indicated tighter stocks and increased exports, resulted in a sharply higher trading day for the CME Group soybean market, right to the close Thursday. 

The July corn futures closed 19 cents lower at $5.88 1/4, while the Dec. contract endes 8 1/2 cents lower at $5.08 1/4. The July soybean contract finished 27 1/4 cents higher $14.57 1/2, while the Nov. 2012 contract ended 30 cents higher at $13.63 1/2. The July wheat futures finished 1 1/2 cents higher at $6.01 1/2. The July soymeal futures closed $8.30 per short ton higher at $424.30 and July soyoil futures closed up $0.64 at $53.46. 
In the outside markets, the NYMEX crude oil is $0.35 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 55 points.

Tim Hannagan, PFGBest.com senior grain analyst, says the trading reflected the report numbers. 

"We will come in Friday and say what report, turn the page and get back to current grain issues like weather and its impact on early emergence," Hannagan says. 

Also, the market will eye demand and planting, he says. 

"One thing is certain, the trade sees these numbers as a one day trade event, as the future suggests potential adjustments," Hannagan says. 

The common thinking is that today's numbers come from the influence of the March 30 Planted Intention Report. That sparked a $3.05 November new crop bean rally over the December new crop corn, since January. This suggests the June 30 Final Acreage Planted Report will show we planted less corn and more beans than the March 30 report stated, Hannagan says. 

"This sets up a reversal of the carry over for corn next year from bearish to bullish. Of course, should the acres remain unchanged then we're certain that on the next yearly cycle high next spring to see historic high bean prices," Hannagan says.

Alan Brugler, Brugler Marketing & Management LLC, says there is a major disconnect between USDA wheat and corn assumptions. 

"USDA sees big use of wheat instead of corn, but has cash average price for wheat so far above corn that it could not happen," Brugler says. 

Also, USDA has a big rebound in corn use despite assuming wheat is being fed instead, Brugler says. "Today's market action is pretty logical given the USDA numbers presented, i.e. everything bearish for corn and everything bullish for soybeans." 

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