Grains futures all close higher Friday and post higher weekly closes.
So, was it all end of month fund short covering or are the markets changing trend and trying to put in a bottom?
Bryan Doherty, Total Farm Marketing, says the technical action was encouraging but as the market start a new week he needs to see another higher weekly close to confirm the market is putting in early harvest lows for corn and soybeans.
“It looks like the funds are continuing to get out of their short positions and end users are seeing grain prices are on sale which is encouraging some buying,” he says.
Additionally last week’s hot dry weather may have shaved yield, especially on soybeans.
So the market was adding risk premium and may have factored in the most bearish yield news.
“It looks to me like the hot weather that the Southern third to half of the Midwest has experienced might be taking a little bit of that shine off the yield potential in soybeans. Bottom line is the USDA has some pretty robust numbers out there and it might be more and more difficult to argue that this crop can measure up to those numbers,” he says.
