The front month soybean contracts barreled through the $10.30 mark Thanksgiving week, largely driven by a combination of factors including palm oil, strength in exports and a growing appetite from China.
The rally giving a bullish headline to a market that still faces weight from such heavy production projections. Dan Hueber of The Hueber Report told U.S. Farm Report host Tyne Morgan, this is a rally that needs to be watched and acted upon.
“There's an old adage in the commodity markets that if the bulls get turkey for Thanksgiving, the bears are going to get it for Christmas,” said Hueber. “Granted this turkey might be a little small, but it still has been rallying at this point, so I tend to think we're going to be in for an extended period of sideways kind of stagnant markets. So, take advantage of the rallying opportunities when they come.”
John Payne of Daniels Trading, also featured on U.S. Farm Report, said to watch the market with caution, but sell when everyone else is buying.
“If you're coming into this growing season and haven't marketed a lot of corn, which I know that's the case for a lot of folks, my advice would be to wait,” said Payne. “I think you have a position right now of the speculator that is very short in both corn and all feed grains across the board essentially. When that weather market comes, we'll see a lot of price action like we saw last summer, where the uncertainty comes from the upside rather from the downside.”
Payne said those are the rallies farmers need to watch and sell into, as we’ve seen largely sideways trade this fall.
“This market is flat right now, doesn't feel like that is giving him any much opportunity, look out the curve, use the July contract if you have an opportunity, and sell when everybody's buying,” said Payne.
“I think for the time being we're probably limited as far as the potential we have on the upside,” said Hueber. “I refer to it as we're going to spend some more time in the desert. We probably don't have a lot of risk to the downside, but without a stimulus to drive us higher, it's hard to get a big challenge going to the upside, as well.”