All major grain futures did an “about-face” after a strong opening at the beginning of the trading session just after the US Dollar initially gapped-lower. All grain markets are down between .05-.10 cents per bushel (as of this writing) after being up as much as .05-.15 cents at the Chicago Board of Trade.
The US Dollar is said to be the culprit of this grain complex volatility this week as the dollar index tanked to three-week lows on Wednesday alone, and then rebounded and being “up” again today. The US dollar is somewhat of the bottom-line when it comes to American goods and products – the stronger the dollar, the less purchasing power an importer has to buy US grains.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view regarding the current grain futures situation by stating, “It was clear to see traders gauging the activity of the US dollar with grain prices on today’s open.” Levy adds, “Gap-higher openings like we saw on the open don’t generally occur without the influence by the USDA.”
All grain futures trends are down with corn and wheat futures leading the pack. I would expect the volatility of both the dollar and grain markets to subside now that the Federal Reserves monetary-policy meeting is behind us.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.