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Friday opens higher, ends lower

06/24/2011 @ 10:05am

CHICAGO, Illinois (Agriculture.com)--After starting higher, uncertainty in the outside markets shook the CME Group and soybean markets lower Friday.

The July corn futures closed 10 1/2 cents lower at $6.70, while Dec. corn finished down 14 cents at $6.32. The July soybean contract settled 2 1/2 cents higher at $13.20 1/4, while the Nov. contract closed 8 cents lower at $13.09 1/4. The Sep. wheat futures settled 8 1/4 cents lower at $6.61. The top-step Dec. soybean meal futures contract closed $2.30 per short ton lower at $336.90 and July soyoil futures closed $0.07 higher at $55.22.

In the outside markets, the NYMEX crude oil is $0.16 per barrel higher, the dollar is higher and the Dow Jones Industrials are down 100 points.

With the markets having a tough time breaking out to the high side, Tom White, FuturesRoad.net, and CME Group corn pit trader says the sell-off is still on. "I'm gonna say that dollar strength is not helping and July open interest was 350,000 contracts at the beginning of the week and still is 250,000 today. This is keeping a lid on the prices, as traders still need to sell off contracts."

Yet GrainAnalyst.com's Matt Pierce says the markets struggle is still too much macro negativity. "I love the fundamental set up, but lacking a rally in crude and the Euro versus the USD, we have little hope.
Corn spreads are turning to the bull side with many looking for old crops stocks to take a major drop on the report next Thursday," Pierce says.
This morning's bean purchase from China was far too small as compared with the 18 cargos sold out of Argentina and Brazil over the previous two weeks, Pierce says.

Richard Feltes, RJ O'Brien & Associates LLC market research vice-president, says the markets will have any gains tempered. "Gains today tempered by lack of confirmation on PRC corn business, improving weather in FSU, PRC and Australia and S Korea passing on corn," Feltes wrote to customers on Friday.

Outside markets are relatively mild this morning, although Paris milling wheat up about 15 cents after oversized early week break, he says.  

Bottom line, the markets are seen consolidating to trading higher today, Feltes says. "The weather over the last week and into weekend is simply too wet. We need heat units and dry weather to optimize root system and nitrogen take-up. Let’s see if we can revert to our stand alone fundamentals today now that latest financial upheaval has run its course." 

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