CHICAGO, Illinois --Just as they started, the CME Group grain markets finished lower, reacting negatively towards the USDA December Supply/Demand Report Friday. That report lowered U.S. grain carryout levels, but not as steep as the trade expected.
The March corn futures settled unchanged at $5.74 1/2. The Jan. soybean contract closed 8 1/2 cents lower at $12.82 1/2. The March wheat futures settled 13 cents lower at $7.75 1/2. January soybean meal futures ended $4.30 per short ton lower at $336.40. The Jan. soyoil futures contract settled $0.04 higher at $54.19.
In the outside markets, the NYMEX crude oil is $0.65 per barrel lower, the dollar is higher, and the Dow Jones Industrials are up 26 points.
Jack Scoville, PRICE Futures Group vice-president, says soybean prices got caught in 'buy the rumor and sell the fact' trading Friday. "There is talk that China is getting close to increasing interest rates today."
Regarding the USDA Supply/Demand Report, the lower soybean carryout estimate was supportive, but as expected, Scoville says. "So, when there was not any other news for beans, some selling and profit taking showed up."
The corn market acted great, considering that USDA did the market no favors by leaving the carryout higher than the trade estimates, the analyst says. "But, people anticipate higher demand from the ethanol crowd and also Argentina should be entering into the reproductive phase of its production cycle, so corn got support anyway.
USDA cut U.S. use for wheat, on better milling yields. "And ending stocks also ticked up in the world estimates. That meant wheat had nowhere to go and as strong as it has been lately it was probably time to see this market move a bit lower as well."
For next week, weather is seen as being the big market issue. "I think we will be back to weather and demand next week," Scoville says. "I also think downside is limited for now, due to these factors. I am looking at the charts now, but I doubt any serious damage was done to trends this week."
Meanwhile, now would be a good time for farmers to take profits off of the table, John Roach, Roach Ag Marketing Ltd, stated to customers in a daily newsletter Friday. "Stating it real simple is to say the green light is on to make sales. You either like the price or you think prices will go higher."
