The soybean market showed plenty of pop last week, despite a disappointing finish on Friday. Prices still ended sharply higher on the week, though the future of a short-term rally remains to the whims of weather and outside markets.
Low volume continues to exaggerate swings from LaSalle Street to Wall Street. This week marks the finale for summer before Labor Day, when many traders likely will be off, so more erratic moves could be seen. Look for the markets to start the week concerned about world growth, with comments by Fed Chairman Ben Bernanke that inflation is under control weighing on the dollar, and prices in general.
As Labor Day approaches the potential for frost threats to start showing up in two-week forecasts also becomes more real. Chilly temperatures in Chicago Monday morning should underscore that nervousness. However, a bearish option expiration in the products — 1,144 out-of-the money bean puts were exercised after the market closed on Friday — could set the stage for some initial follow through selling.
Or not. Prices swings lately seem at the whim of whatever the flavor of the day is. Until that trend shifts to focus on supply and demand fundamentals, the market's trend is not likely to be clear. To read Bryce Knorr's full soybean review, click HERE.