AM Comments 02/12/16
Friday, February 12, 2016, 7:02 AM
Submitted by: Dustin Weiner
The soybean rally yesterday caught many traders by surprise as initially you look towards South America and you see no problems in weather. The soybean strength was attributed to strength in palm oil (effecting soy oil which in turn bumped up soybeans) as palm oil has made new 21 month highs. The El Nino weather pattern which tends to benefit some areas, causes drought in others – in this case Malaysia and Indonesia are getting the drought and they produce something like 90% of the world’s palm oil.
For today it appears things are settling down (even with firmer outside markets - crude and equities are higher as of now) as yesterday’s rally may have been a touch overdone. The markets started higher last night and slowly sold off into the morning. The fundamentals of the market are still pretty clear in telling us that there is little opportunity for sustained rallies.
**NOTE** The Chicago Board of Trade is closed Monday in observance of President’s Day
Soybeans down 1 to 2 cents
Have a great day!