Technical and fundamental factors pull markets lower
A market analyst is not surprised corn and soybean futures lost some steam this week.
Arlan Suderman with StoneX says from a technical standpoint, the trade is driven by computers that are trading momentum.
“We had gone up, particularly in soybeans with corn following, we had gone a great deal of distance without a major correction in the market. So we were in an overbought situation and were vulnerable to a significant correction.”
And fundamentally, he tells Brownfield South American weather is less threatening as the Brazil soybean harvest gets underway.
“So it was a time for pause to see what those harvest results are. Unfortunately, those harvest results are going to be very slow coming in for a little while. Typically 40 percent of Mato Grasso soybeans would be mature by now, this year it’s only about 8 percent.”
Suderman says depending on how significant the market correction is, soybeans could fall below $12 with corn a likely follower.