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Wheat pushes grains to higher close

Updated: 10/26/2010 @ 2:28pm

CHICAGO, Illinois (Agriculture.com)--Wheat leads the CME Group grain markets to a higher close Tuesday. 

The Dec corn futures finished 2 1/4 cents higher at $5.71. The Nov. soybean contract closed 1 1/4 cents higher at $12.19. The Dec. wheat futures closed 18 cents higher at $6.92.  The Dec. soymeal futures contract finished $0.90 higher at $335.50 per short ton. The Dec. soyoil futures contract ended $0.06 higher at $49.53.

In the outside markets, the NYMEX crude oil is $0.12 per barrel higher, the dollar is higher, and the Dow Jones Industrials are down 13 points.

Jack Scoville, PRICE Futures Group vice-president, says the higher wheat market was driven by some traders with short positions rolling forward in the beans.

"Wheat was the strength of the market on the crop condition ratings and pulled corn and to a lesser extent beans with it.  Also, having cotton move sharply higher supported grains a little bit.  I heard talk of demand for beans but I can't get anything confirmed," Scoville says.

He adds, "One thing is for sure, the bean harvest is about over and what needed to be sold is sold. So, if you need beans you have to show the farmer a reason to sell, and this might have supported some basis for nearby." 

Other market news was rather slim, Scoville says. "We were up despite the dollar which is interesting. It implies that either there is a lack of an offer or new demand away from the wheat. I think there is more of a lack of offer out there in the country right now as my buyers seem quiet."

Matt Pierce, a CME Group floor trader and analyst with PitGuru.com, says the sentiment of the trade is to sit and wait. "The next catalyst is just around the corner and may come from Aussie weather, Chinese demand, domestic HRW weather, currency movement, yield reduction or commodity basket buying," he says.

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