Did the summer weather rally occur? ------------------------------------------------------------------------------------------------------------------------------
Did the summer weather rally occur?
https://www.agriculture.com/markets/analysis/corn/did-summer-wear-rally-occur_9-ar24837
It rained in Cass County, Nebraska this week. At my farm, it was only a half-of-an-inch. Nonetheless, it is better than nothing. That is the third rain in a little over a week. The total is 3.8 inches. That is not enough to last for the summer. Still, it is a lot better than nothing. It is also a lot better than some areas of the country have gotten.
What makes it more noteworthy is that the summer weather rally high on the 30-year soybean chart is the 15th trading day of June. This year, that summer weather rally day was June 21. The summer weather rally on the 30-year corn chart is the 14th trading day of June. That was Wednesday. Action in the markets on Thursday looks a lot like a weather rally high.
With all of the unusual things going on in the markets, the scenario is certainly set for some type of correction. For one thing, the old crop corn basis peaked out here in Cass County at +.26 on Friday of last week. It has since pulled back four cents from Monday of this week. I have been telling readers to watch for slipping basis as a negative sign.
In addition, the deferred contracts in both soybeans and corn have been holding together better than nearby contracts. That is normally a sign that the buyers want the grain, but just not in a big hurry as they have until this week. Nearby contracts slipping faster than new crop is another reliable negative sign for future price direction.
If Thursday’s action in the soybean and corn futures market continues as it did, it will be an example of the seasonal event hitting very close to the expected date. It is so close, in fact, that I wonder if it can be true or if it is just the market throwing a fake to take traders out of long positions before a bigger run up.
Many of you know that I test my seasonal theories by trading a small speculative account in soybean futures. Thursday, June 21 was the day the position turned from long to short. The long trade in place since May 29 netted $.79. If it had been Wednesday instead of Thursday it would have netted $1.13. When I make trades in the spec account, I never know if they will be profitable or unprofitable. Many times the ones that look the worst when made turn out to be very profitable in the end. We will see if this trade proves the seasonal strategy again to be a good signal to trigger sales!