Markets rebounded Thursday, Oct. 13, with CBOT December corn jumping up more than 12 cents to close above $3.49. November soybeans soared by more than 10 cents, closing above $9.56.
“What a recovery today,” says DuWayne Bosse, of Bolt Marketing, in Britton, S.D. "One day doesn’t make a trend, but it definitely is an impressive rally."
It was corn's highest December close since July 19, according to Water Street Solutions.
Although the uptick in prices followed USDA’s Oct. 12 WASDE report, most analysts considered the report “neutral” and say it didn’t appear to have sparked the rally.
"[The USDA report] wasn’t that different from what analysts expected,” says Larry Shonkwiler, of Advance Trading, in Bloomington, Ill. "It’s possible today’s rally was a correction for overdoing selling-off."
Water Street Solutions maintain the rally in corn "bounced off technical support and spillover short-covering on wheat."
Bosse saw some additional factors in play. For example, growing season contracts will expire in a month, and it’s time to start unwinding them, he says. As a result, there was “a whole lot of position squaring and unwinding” in the market, which meant corn was being bought and soybeans were being sold, according to Bosse.
“When the prices went high enough on corn, bulls got excited and accelerated buying interest,” he says.
Farmers should take advantage of the rally, Bosse advises, noting that in most years, prices tend to slump in November.
“If farmers are combining corn and know they will have bin overrun, they might want to sell on a rally like this,” he says.
Although soybean demand from China has remained strong, USDA’s report showed sharply higher world stockpiles, which could impact prices, Bosse notes. There's still a chance China will take a closer look and decide there's no rush to buy soybeans at this time, he says.