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Soybean prices settle sharply higher

11/09/2010 @ 9:37am

DES MOINES, Iowa (Agriculture.com)--From the start to the ending bell, the CME Group soybean market remained sharply higher, following of the USDA lowering the U.S. ending stocks Tuesday.

The Dec corn futures settled 9 cents lower at $5.76 1/4. The Jan. soybean contract closed 54 1/4 cents higher at $13.29. The Dec. wheat futures ended 14 1/2 cents lower at $7.21 1/4.  The Dec. soymeal futures contract closed $17.50 higher at $363.90 per short ton. The Dec. soyoil futures contract settled $1.36 higher at $53.73.

In the outside markets, the NYMEX crude oil is $0.33 per barrel lower, the dollar is higher, and the Dow Jones Industrials are down 27 points.

"There is room for more upside tomorrow," one anonymous grain analyst says. Around mid-session, the outside markets reversed, namely the Dollar going from lower to higher. That stifled the corn, wheat markets. Also, spread trading and profit-taking set back those two commodities' rally.

"Soybeans were the surprise in the USDA Report today," one CME Group floor trader, choosing to remain anonymous, says. "So they show relative strength. Everyone is long options and corn spreads, so they are looking to take profits. I think it's a rational trade with corn +2 and beans up +50. I do think prices need to move higher still," he says.

Tim Hannagan, PFGBest.com senior grain analyst, says the closing trade is a good indicator of tomorrow's direction. "The market participants traded the numbers as they came out today, mildly bullish corn and wheat but very bullish beans. The January soybeans reached as high two cents from limit up, but funds fat with profits began taking profits right on the opening. That's report day normalcy, price in the report, then go to the bank with it."

Hannagan adds, "The close tells us the trend near term. Lower closes means more selling ahead, as this is the last bullish report until January. But, a higher close and
stock funds will take us to new highs tommorrow. THE CLOSE KNOWS."

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