Grains closed stronger with soybeans leading the way. July corn finished 7 ¾ cents higher at $5.94, July soybeans 41 ¾ cents higher at $14.28, and July wheat up 17 ½ cents at $6.41 ¾.
A drier forecast as well as stronger outside markets kick-started this rally early. The fact that China lowered interest rates by 25 basis points also helped spur strength early. The highly anticipated meeting between Fed Chairman Ben Bernanke and Congress was a rather "non-event". Many analysts were calling for another round of Quantitative Easing which never came. If and when the "QE3" is announced it is generally expected to be supportive to equities and commodities and bearish for the US dollar.
The new crop contracts were leading the way higher for much of the day and the July – December corn spread ended the session down 9 ¼ cents at +57 ½. This is partly due to the fact that this rally is weather based and it is supporting the crops in the ground more than in the bin. It is also could be due to the fact that the Goldman roll started today and the exiting of July contracts is forcing the spreads lower.
Trade direction still highly depends on the morning and midday forecasts. The latest forecast was a little drier again in the 7-14 day range, obviously supporting grains in the process. We are finally back above the 50 day moving average for December corn and not far away from the 100 day. If you would like a free trial of the EHedger research please click on the link below. To discuss opening a futures/options account please contact EHedger at 866-433-4371. Thanks and have a great weekend!
December Corn Chart
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