Market Perspective

The rally in grains has continued over the last two weeks. Dry conditions in the Southern Plains and decent export demand have finally forced the speculative commodity funds to cover about half of their record short position in the wheat futures. Corn and soybeans have also moved higher as investment funds have lightened their positions in equities and shifted some of their funds back into the commodity markets. Technically the market is now overbought and possibly due for a technical correction at some point.

On the fundamental side, when wheat prices were at their lowest about a month ago, w...