Friday, May 2, 2008

Soybeans and Corn

Soybeans has sustained its price gains for the day (left chart), while corn has reversed and is very likely to close down for the day (right chart). This strikes me as an odd phenomenon, given that corn prices have been moving higher lately, and soybean prices have been sagging. Both are in a consolidation pattern on the daily charts. Perhaps this is occurring due to a change in weather patterns, but this is just a wild guess. Mid-session, the CME reported that corn "traders indicated that the tone is weak in export markets due to a lack of demand and a well-stocked pipeline." Perhaps this affected corn prices. However, demand for soybeans was relatively weak also, and prices closed higher! As I have said before, the reason is ultimately irrelevant. All that matters is that the phenomenon occurs.