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Wheat market provides support for corn, analyst says

Agriculture.com Staff 05/09/2006 @ 7:40am

A 34-day low in the corn market, and a breakout to the upside in the wheat market has sparked higher early calls for Tuesday's trade for the Chicago Board of Trade futures, one analyst said.

On the early calls, corn is expected to trade up $0.03, wheat up $0.04, and soybeans as high as $0.08, according to the Dow Jones newswire.

Despite the USDA's Crop Progress report showing a slowdown of corn planting from last week, the U.S. growers are still on a record pace for getting this year's crop in the ground.

Therefore, Jason Ward, North Star Commodity Investment Company, said other fundamentals are driving the corn market higher. "The wheat crop is still suffering as the crop progress showed a 3% decline from last week. On Monday, the wheat market jumped $0.06, and you are going to drag the corn market up with wheat. Plus, the technical bottom on the market is helping corn push higher. I don't think you can say the weather is bullish with much of the rain helping the already planted corn."

For soybeans, an early price call of $0.08 higher may be attributed to the USDA's crop progress report showing slightly lower planting progress than trade estimates, Ward said.

"We were down $0.07 on the beans yesterday, so we're just going to gain back those losses from Monday," Ward said.

Meanwhile, John Roach, Roach Ag, said in a morning newsletter that despite morning wires suggesting that less than expected plantings were the reason for the overnight strength in corn and beans, he just thinks the trade just wants to be bullish.

"Planting progress for corn and beans are at or above average for this date. Spring wheat was slightly behind, however, being reported at 57 % planted compared to the 5-year average of 60 %," Roach said.

Roach said don't disregard the Funds being sellers in the corn and bean pits on Monday, but buyers in all three wheat markets.

"Funds sold about 10,000 contracts of corn and a similar amount in the bean complex. The gap lower opening and island tops left in those markets that looked ominous for bullish traders yesterday but overnight trade came right back higher," Roach said.

A 34-day low in the corn market, and a breakout to the upside in the wheat market has sparked higher early calls for Tuesday's trade for the Chicago Board of Trade futures, one analyst said.

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