Corn and soybeans finally ralled on Friday after hitting contract lows the previous session.
The pop in grains was mostly due to short covering as the markets were oversold after removing weather premium all week.
Some traders were also taking profits on grains to pay for their margin calls in the plunging stock market.
However, DuWayne Bosse of Bolt Marketing says he thinks it will be tough for corn and soybeans to build on these gains with higher yield projection being released by private firms.
He says, “I’m afraid 100% of it was profit taking from an ugly week we had. You know we sold off really hard. It’s nice to see the pop but sadly I think this was all short covering and kind of a dead cat bounce off the lows.”
He thinks the lack of a serious weather threat, in addition to farmer selling of old crop will cap any rallies.
“I’d love to tell you I have bullish reasons for this market to trend higher from here but I really don’t. What changed for me this week was the weather. Last week the extended forecast was hot and dry and I thought we would be sharply higher Sunday night allowing for some hedging opportunities and the exact opposite happened. The weather changed and we had rains in Iowa and Illinois,” he explains.
