Futures & Spreads
May beans low yesterday was lower than Thursday’s low and yesterday’s May beans settlement price was higher than the high made on Thursday. The Tech Guy pointed that out to us. Technicians call that a “key reversal” of a down trending market.
Many of you have May basis contracts which need to be rolled or cashed out no later than the close of the CBOT on Monday, April 29th. Many merchandisers will require you to roll or cash out sooner than the 29th, so check with your merchandiser to avoid a surprise.
Typically, futures decline into the delivery period because all traders are strongly encouraged by almost everyone in the grain business to liquidate their long (bought) May futures positions before the last business day of the month. The only way to liquidate a long futures position is to sell futures contracts and that is what causes weakness. But nothing is 100% in this business.