Grains ended higher on Tuesday.
Randy Martinson, Martinson Ag, says grains were technically able to build on higher weekly closes and that encouraged the funds to take some profits on their short positions in the grains.
“Technically its time for these markets to see a little bit of recovery to entice more players to come back into the market place,” he says.
He says the grains have also hit four year lows which are making commodities look like a bargain, especially compared to markets like the stock market, so that encouraged some buying interest.
“Grains are at four year lows, so we’re looking pretty cheap,” he adds.
He thinks buying also stemmed from ideas yield and crop conditions may be declining with the recent hot dry weather and a dry 6-10 day forecast.
“Its a bet that we’re seeing some of the top end yields taken off this crop and the fact that we have really strong demand yet,” he explains.
Demand has also been picking up with another 4.85 million bushels of flash soybean export sales to China and strong export inspections for all of the grains.
“The rumor is that they are going to continue to buy and there will be more announcement from China coming and right now if we’re not the cheapest soybeans and corn in the world we’re real close to it,” he says.
China has bought U.S. soybeans as the price has dropped nearly a $1 below Brazil.
