The economy may be improving, but under traders' radar screens. Bill Fordham of C&S Grain Market Consulting points out that weekly USA railroad freight is now more than 20% above a year ago and intermodal units (containers) are 35% above a year ago. In addition, U.S. fuel use is 108%. These factors suggest that products are moving in a stronger economy, he says.
Last week, index funds, large specs and commercials reduced their net-long soybean contract position modestly.
"Traders and money managers may not properly recognize the building strength in the U.S. economy at the present time," Fordham says.
Grains could get support when traders realize the economy is shifting and consumers may be spending again---both on increased consumer demand for food (especially meat) and renewed inflation fears. "Livestock herds are down; when will they begin rebuilding and using more feed again?" Fordham asks. "Don't panic sell now; corn and soybeans both are seeking their spring price lows and should turn seasonally higher within a few weeks at most."