AM Comments 02/04/15
Wednesday, February 4, 2015, 7:02 AM
Submitted by: Dustin Weiner
What a day it was yesterday as the funds seemingly flipped the switch and started buying again. March corn closed 16c higher yesterday and March soybeans finished 27.5c higher! These rallies were surprising and left many in the trade wondering if there were any new news stories that changed the fundamentals. Well, it doesn’t appear that there was... This simply seemed to be a case where the $US turned sharply lower (going against the recent trend) and BAM – there was a renewed interest in buying commodities. Risk was getting put back on as crude oil (and most commodities) rallied along with a higher stock market. Once the market turned higher the “weak shorts” appeared to bail on their positions (read: buy them back) and things got a little out of hand. The market did settle off its highs, but as noted above – still pretty firm.
Today, however – the $US is slightly firmer, with crude oil and the stock market slightly lower. This is opposite of yesterday (albeit, less extreme) and prices are reacting as such with both corn and soybeans a touch lower as of this writing. Increased farmer selling yesterday (thanks to the rally) could also be adding to the weakness in today’s markets. Export corn/soybean basis was weaker going home yesterday which is another sign that the farmers were selling.
Overall, I’d like to tell you that the markets should continue to trade lower today – in sympathy with the outside markets and taking a breather after yesterday. However, yesterday’s rally may have turned the charts around a bit and I wouldn’t rule out a two-sided trade as new money attempts to join in the fun.
Corn down 2 to 3 cents
Soybeans down 4 to 7 cents
Have a great day!