Tuesday saw mostly higher grain prices. Soybean bulls had to fight back the bears to make limited gains on the day. Darin Fessler, Lakefront Futures and Options, highlights that soybeans continue to have the strong weather story and Chinese demand that keep bulls in charge. However Fessler encourages producers to have plans and targets in place in case the commodity market quickly shift. Fessler reminds listeners of what happened 4 plus year ago when commodity prices were near similar levels.
Fessler also looks into the current cash market which continues to encourage selling the physical commodity. The market offers little carry between contract months and Fessler believes there might be better options to sell the grain and own paper to take advantage of higher moves in the market.
The broader market on Tuesday was feeling fairly risk on with the DOW Jones hitting 30,000 and crude oil up over 4%. Yet Fessler doesn’t see the current rally in commodities as inflation rather the result of production concerns combined with strong demand. For Fessler this means there is still room for commodity inflation in 2021.
You can catch the full conversation with Fessler here: