Fund positions could be one reason grain markets were trading mostly higher Monday morning, despite record-breaking USDA production forecasts, according to Joe Vaclavik, commenting in his Standard Grain blog.
“My take on the corn market is … I think you’ve got a big fund short in the market,” Vaclavik noted, adding that funds hold “a pretty heft short position.”
If funds continue to add to this, they may sell at rallies, “but there is not a whole lot left for them to sell at this point,” he noted.
In early trading, December corn futures were up 3¼ cents to $3.36¼; November soybeans were up 16 ½ cents at $9.98¼ and December Chicago wheat was up $2.34 cents at $4.42 ¾.
So what is Vaclavik’s advice for farmers? “I think farmers will sell into rallies,” Vaclavik said. “They are going to have to.”
Click here to listen to Vaclavik's full comments.