A surging Dow Jones Industrials, a falling Dollar, and world crop weather concerns helped the CME Group grain commodities close sharply higher Wednesday.
The March corn futures settled 22 1/4 cents higher at $5.66 1/4. The Jan. soybean contract closed 40 cents higher at $12.83. The March wheat futures settled 49 1/2 cents higher at $7.40. The Jan. soyoil futures contract settled $1.61 higher at $52.61. The Dec. soymeal futures contract closed $7.80 per short ton higher at $348.50.
In the outside markets, the NYMEX crude oil is $2.48 per barrel higher, the dollar is lower, and the Dow Jones Industrials are up 258 points.
Tim Hnnagan, PFGBest.com senior grain analyst, says the markets had a running start with bullish news pulling up sharply overnight markets. "First, let's set the stage for the wheat and grain rally. Monday brought the last weekly crop condition report of the year for wheat showing 47% of the crop was in good to excellent condition, the worst condition in 20 years," Hannagan says.
Hannagan adds, "Then yesterday, Canada told us just how little high protein milling wheat they have, noting they have a six year high of low quality wheat, only suitable for feed usage. Then number four world wheat producer exporter, Australia, announced record wheat harvest rains have cut protein levels sharply, while India announced they are stopping wheat exports until the world wheat production situation for 2011 clears up."
All this news together brought heavy buying to wheat Wednesday. Trend-following funds recently built a 45,000 contract short position, the most since last spring and began short covering for protection, Hannagan says. "And with corn and bean traders sitting on big cash from the recent profit-taking break from Nov. 9, they came back in buying Wednesday," he says.
