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Ron and Sue Mortensen: Bull could soon be fed with hot temperatures
During the month of June, any mention of hot/dry weather got very little attention, as many farmers and analysts hoped for such an occurrence, rather than the wet, soggy weather that soaked corn and soybean fields all around them.
Nowadays, there are pockets of dryness (in the southern Midwest and parts of the Delta) and there are still pockets of soggy acres (strips of Iowa got soaked again last night, for example). The hot/dry theme has begun to creep in the long-range forecast (11-15 days out).
Beyond the US forecasts, there are other positive fundamental factors at work. China has re-surfaced as a buyer of both old-crop and new-crop beans. They also bought some soybean oil. Hot, dry weather has caused concern in other areas of the world, particularly with the wheat crops in Russia, Kazakhstan, France and other parts of the EU. Finally, even though it has been a week, market participants are still reacting and readjusting to the USDA's acreage and stocks reports.
Depending on the commodity, this rally has not taken prices above the range established since February or March. Prices are certainly at the upper end of the ranges, but have not made significant spikes the way weather rallies can. The bull needs to be fed every day, so stay tuned to the weekly diet of market information--weather forecasts, crop condition reports and export sales reports.
The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.