June has been a volatile month for soybean markets and commodity markets in general.
As news broke how China planned to proceed with tariffs on U.S. agricultural products such as soybeans and orange juice, soybean prices tanked. During the trade on Tuesday, soybean prices dropped 40 cents.
It’s not solely China that’s creating volatility in the markets. Last week, Commerce Secretary Wilbur Ross testified to Congress in regard to the tariff situation. After visiting with farmers in North Dakota, Ross said it’s not just China or the tariffs, but speculative money in the markets as well.
DuWayne Bosse, founder of Bolt Marketing, LLC., agreed and said the funds drive the markets. During the trade on Tuesday, Bosse said that there was a lot of “panic selling” and brokers were hedging early.
“Funds that are short could easily get burned going back the other way,” he said on U.S. Farm Report.
According to Matt Bennett, owner of Bennett Consulting, the funds are short 50,000 to 60,000 contracts. He expects this to give the market a chance to “wash out” and reset.
“The problem is that we don’t have a weather story right now,” he said.
Hear Bosse and Bennett’s full comments on the soybean market and prices on Markets Nowon U.S. Farm Report above.