Did fake news spark Tuesday’s market rally?

first_imgShare Facebook Twitter Google + LinkedIn Pinterest On the last day in February farmers — and the rest of the world for that matter — were anxiously waiting to hear what President Trump was going to say as he addressed Congress for the first time. But what got the attention of producers earlier in the day was a major price move to the upside for corn and soybean trade in Chicago. The spike was caused by a news story about possible changes in the Renewable Fuels Standard (RFS) mandate. That story, like many have in recent weeks, may not have been that reliable.“At the beginning of the morning on Tuesday, leaked information suggested that there was going to be a significant change to the way the ethanol blender credits are working,” said Jon Scheve, a grain merchandiser with Superior Feed Ingredients. “By midday, the White House would not confirm whether or not that information was real and there might not be a change at all. The market through all of that yesterday was just trying to figure out what would happen if anything actually does change with the RFS.”The news that was leaked early in the day consisted of the White House looking at a proposal to add more ethanol usage during hotter months and would aim to curb imports of biodiesel from Argentina by ensuring domestic producers qualify for a currently-expired tax credit.Call it fake news, call it an information leak gone awry, but in the end it was the catalyst for a record day for corn trade. Over 350,000 May corn contracts were traded Tuesday. Since harvest, corn has only traded more than 100,000 contracts of the front month twice, today and Election Day.“I think this could possibly be the future of trading this year,” Scheve said. “With this new administration, how we are getting our information is also new. The markets and even the news organizations aren’t quite sure how to handle that yet and so I expect we will see many news items like the one we saw on Feb. 28 that will generate some short bursts of excitement.”At the close on Feb. 28 corn was only up 4 after being up 18 and beans were up 13 after being up 35 for the briefest of moments, keeping farmers and traders on their toes.last_img

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