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The CME Group grain markets close sharply higher

Updated: 08/04/2010 @ 3:38pm

CHICAGO, Illinois (Agriculture.com)--The Russian drought-talk and other world crop-loss issues helped the CME Group grain markets close sharply higher Wednesday.

The Dec corn futures closed 11 cents higher at $4.15. The Nov. soybean contract ended 6 1/4 cents higher at $10.24 1/2. The Sep. wheat futures closed 45 3/4 cents higher at $7.25. Dec. soymeal is $2.40 per short ton higher at $292.40, and Dec. soyoil is 42 points higher at $42.10.

In the outside markets, the NYMEX crude oil is $0.24 per barrel lower, the dollar is higher, and the Dow Jones Industrials are up 41 points.

Tim Hannagan, PFGBest.com senior analyst, says the market jumped sharply higher in the first 30-seconds. "Then profit-taking kicked in and corn and soybeans backed off. Still, the market is supported by the usual Russian-drought talk, but also big demand. Everyday this week, China has been 'in' for corn and/or soybeans. This morning, China bought 121,000 metric tons of U.S. soybeans."

Hannagan adds "Keep in mind, on this Russian drough, that people over the weeks have been saying this is the worst drought in 20, 50, 130 years. No, this is the worst drought ever, for Russia. Ok, so what does that mean for this market? Well, last year, Russia was taken wheat business away from the U.S. right and left. Now, Egypt and other countries will be buying from the U.S. Why? Because it's not just Russia with crop-weather problems. Northeast Australia's wheat-producing area is hurting, the FSU countries are reporting crop-losses. All of these factors make, what was a bearish looking U.S. wheat ending stock supply, very bullish." 

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