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Corn closes higher, wheat and soybeans lower

Updated: 09/10/2010 @ 2:07pm

CHICAGO, Illinois (Agriculture.com)--As it traded most of the session, the corn market closed higher, wheat and soybeans lower Friday.

The Dec corn futures closed 7 1/2 cents higher at $4.78 1/4. The Nov. soybean contract settled 15 cents lower at $10.31. The Dec. wheat futures closed 12 cents lower at $7.36 3/4. The Dec. soyoil futures ended 17 points higher at $41.76. The Dec. soymeal futures closed $8.50 lower at $293.50 per short ton.

In the outside markets, the NYMEX crude oil is $2.19 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 52 points.

Joe Bedore, FC Stone's CME Group floor manager, says  the USDA's new corn yield estimate of 162.5 bushels per acre came in where the trade thought. "We now will trade a 158, or 159 yield number. The market is doing what I thought, find buyers on the breaks and rally on up," Bedore says.

The soybeans are the surprise of the day, with the USDA’s higher yield than expected, he says. "The jury is still out for the soybean market. The upcoming planting season in Brazil will become the focus of the market. That country is going through a dry stage. So, regardless of what the U.S. crop is, this market will look ahead and see what is going to happen in Brazil. So, I don’t expect a big break in bean prices."

Meanwhile, the market wasn't disappointed by the larger than expected ending stocks. "You can’t trade the ending stocks number because demand figures can be adjusted in the future. Once the yield comes in you can’t adjust that much, right? But, you can always adjust demand. If demand picks up, everyone will say, I told you that ending stock number should be 800 million bushels, not 1.1 billion."

Wheat numbers disappointed, but we still have crop problems in Russia for two years out.

All in all, if you had to put a label on this data as just one report, technically, it was negative." 

Tim Hannagan, PFGBest.com senior analyst, says that traders didn’t get as bullish news as feared. "So, this leaves room for weekend profit-taking."

Hannagan adds, "But, this report does set up a much more bullishly anticipated October report. Though the government cut corn ending stocks and production in today's report, and though good cuts, it's considered conservative by the government. It means we're probably going to come in under 1 b.b. carry over on the next report. Plus, keep in mind, the fields to be harvested thru September's end will be the eastern Corn Belt and southern Delta, the worst of the yields. The better western Corn Belt yield won't come until October," he says.

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