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Traders react to reports of flooding and crop damage
Photo from Brownfield reporter Meghan Grebner’s family farm in central Illinois, 30 miles northeast of Peoria.
Grain and soybean futures were higher Monday as traders reacted to reports of flooding and crop damage caused by weekend storms.
DTN market analyst Darin Newsom says non-commercial short covering was the big factor.
“We saw some heavy buying come in on covering of those positions,” Newsom says. “That’s what moved the markets and that’s what could continue to move the markets because, in corn, it’s similar to what we saw last year when a short-covering rally took the market up 90 cents due to wet weather.”
Newsom says the situation is different this year because of larger old-crop supplies. But he says weather over the next two weeks could make it interesting.
“If we continue to see rain, these markets are going to have a reason to rally, both corn and soybeans,” he says. “I mean some farmers are saying it’s going to be two weeks before then can get in the field, at least now anyway.
“The next two weeks are key. They’re vital to the direction these markets decided to take.”
AUDIO: Darin Newsom
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