CHICAGO- Chicago Board of Trade grain and soybean futures rallied on Friday on money flow from managed funds, rising demand and weather concerns, analysts said.
The markets bounced off a lower close the previous session that followed release of bearish US Department of Agriculture supply/demand data.
“We’ve seen a number of different data points suggesting the economy is going strong, which means more demand for commodities,” said Arlan Suderman, chief commodities economist at StoneX, pointing to the Consumer Price Index reading for March on Wednesday and the Producer Price Index on Thursday.
He added there was a statistical correlation between rising inflation and funds flipping from short positions, or bets that prices will fall, to long positions.
Analysts also pointed to US export sales announcements of over a half million tons of soybeans to unknown destinations this week.
“People have looked up and said ‘Oh I got another sale. How short do we really want to be?’” said Jack Scoville, vice president of The Price Futures Group.
