Tuesday, April 1, 2008

Short Covering Rally, Fund Managers Rebuild Positions

The CME is reporting that the rally in soybeans today was due to shorts who were taking it in the shorts. It was not demand-driven. The second factor that drove prices higher was fund managers who sought to reestablish their long positions in the commodities markets for the new quarter. I suspected that this was the case.

And this is no April Fool's.