Corn and soybean futures have been quite volatile this week as traders react to an ever changing weather forecast. At the beginning of the week, the outlook called for hot and dry conditions to continue well into next week. On Wednesday, the forecast changed to include cooler temps and the chance of rain this holiday weekend. Tom Fritz, with EFG in Chicago, said, if the weather changes this weekend, expect a sharp selloff next week, “If we see get the cooler weather and widespread rain over the weekend, they will hit this market hard next week.” The trade is especially nervous because the market will be closed for three days over the Labor Day weekend.
Jim Riley, with Riley Trading, says just cooler weather alone will not be enough, in fact it may spark fears of an early frost. Riley says precipitation is the key, “We have to have rain to really make a difference in this crop and stop the yield loss.” When traders return on Monday evening, they will focus on the weekend weather. Fritz said it could be a very volatile session.
Longer term, the outlook is calling for a different weather pattern as we move into September. Hoosier Ag Today meteorologist Rob Wasson says, “The extended, two week forecast calls for a nice reversal to the hot weather with below normal temperatures. Rainfall should also average below normal across the entire Corn