This chart of corn overnight is symbolic of the strength of grains. Corn is up by 15 cents -- half its lock limit -- overnight. In recent weeks, many funds and traders have been liquidating their grain positions before the weekend to avoid the risk of uncertain weather, and last week, this phenomenon was amplified even more in anticipation of the Fed's rate decision this week. However, the following Mondays (Sunday evenings), these traders have a tendency of late to reestablish those same positions in anticipation of further price strength, largely due to strong global demand, the biofuels fad, and continued weakness of the Dollar. Without these fundamentals factors, funds and other traders would probably walk away from grains as an investment.Monday, April 28, 2008
Grains Move Higher Overnight
This chart of corn overnight is symbolic of the strength of grains. Corn is up by 15 cents -- half its lock limit -- overnight. In recent weeks, many funds and traders have been liquidating their grain positions before the weekend to avoid the risk of uncertain weather, and last week, this phenomenon was amplified even more in anticipation of the Fed's rate decision this week. However, the following Mondays (Sunday evenings), these traders have a tendency of late to reestablish those same positions in anticipation of further price strength, largely due to strong global demand, the biofuels fad, and continued weakness of the Dollar. Without these fundamentals factors, funds and other traders would probably walk away from grains as an investment.
