Market Report: Beans Higher Tuesday

While beans continued their rally Tuesday, corn was dead in the water. Corn closed up a fraction after trading only 1-2 cents higher. Corn traded up to overhead resistance at $3.72 but could not break through. The International Grains Council reported that export prices for corn here in the U.S. and Argentina were the same at $164 a ton. The basic fundamentals are very bearish, at least in traders' minds, and that that is making a rally very tough. When you consider that it would take only about a drop of five bushels an acre below trend line yields this year to dramatically change the picture, it does not seem to register with traders.

Beans were the leader in the grains Tuesday, closing with gains of 6-8 cents. That was well off the highs; at one point in the afternoon beans were up about 12 cents. Bean prices are being supported by meal and oil. The last NOPA Crush showed strong demand for meal. The weather problems with palm oil production is supporting demand for a substitute, which is bean oil. May beans closed above the 200-day moving average, which we have not seen since August. Beans have not consistently traded above the 200-day moving average since July. The key will be the Prospective Plantings Report and Stocks from the USDA next week. This is a big report that has a history of moving markets.