Market Comment
After 4 to 6 days of gains, corn, wheat, and beans all closed lower Friday, which is a down day if the markets had been decided higher in the days before Friday. Traders know a lot of things can change over a weekend.
If you are looking for a place or time to get long futures or call options, this is the week to probably do that. The USDA S&D on Thursday at 11 Am Central time usually causes the market to trade lower in the days before the report. The coming S&D certainly had something to do with Friday’s sell-off in addition to end-of-the-week profit taking.
Everything else being equal and just focusing on the Thursday S&D, Monday will be a down day and Tuesday will trade lower and will probably close lower. Wednesday late morning and afternoon will be a modest recovery day as there will be traders who expected a price decline, but do not want to stay short at the lower price through the report, so they will be buying to offset previous sales. That is called “short-covering.” We have clients who sold on Thursday evening or early Friday and they are looking to cover shorts or re-establish long positions this week.