Funds pose biggest threat to bull market


Funds pose biggest threat to bull market

A risk analyst points to private investors as the biggest threat to bullish soybean prices.

Rich Morrison with NAU Country Insurance Company says the funds are holding the largest long position they’ve ever held for this time of the year.

“And they have for about three to four months now, but going forward the question is going to be of course ‘what are the funds going to do?’ Are they going to come up with more money to add into these markets? Or at some point you would have to think that they are likely to become sellers.”

During a webinar hosted by Farm Credit Mid America Friday, he encouraged farmers to take advantage of the rally ahead of fund liquidation.

“The last time we were at these levels was back in 2014. If you’re just looking at the chart and you’re a speculator, you’d probably say maybe this market has another Dollar in it. Maybe we go back and challenge the ’14 highs.”

Morrison says another reason to limit downside risk is because the market is well into overbought territory.

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