Even as cash prices plummeted 25 cents or more for weekenddeliveries the futures screen managed to push higher Friday astraders looked past the unseasonably warm weather outside theirwindows and focused instead on short and medium range forecasts.After a strong opening at $2.56 the December contract caught a waveof technical buying from both trade and local shorts, allowing itto peak at $2.71 before settling up 12.7 cents at $2.649.

According to Brad Nesiba of Omaha-based Strategic WeatherServices, change is in the air beginning Tuesday and Wednesday overportions of the Plains and Midwest. “The ridge of high pressure inthe Western U.S. that has dominated weather for the last month isweakening and will be replaced by a more seasonal troughing patternacross the northern third of the country.” And although nowhere inhis forecast are the phrases “Arctic cold front” or “much-belownormal” it does represent a dramatic departure from the recordsetting high temperatures of last week.

And Ed Kennedy of Miami-based Pioneer Futures believes it wasforecasts like that one that sent the market higher Friday. “Theindependents weighed in with a bullish surprise and theOver-the-Counter market rallied from $2.49 to $2.56 before theopen. Once underway, the market was fueled by short-coveringactivity by trade and local accounts,” he said.

Looking ahead, Kennedy expects continued volatility as themarket reacts to updated forecasts. The first of those forecastscame Friday afternoon, too late to impact the closing price.According to Kennedy, that forecast differed slightly from theprivate forecasts in that the NWS does not have the cool airreaching as far to the east. Because of that, Kennedy believes thata lot of stock will be put in the revised forecast released by theNWS Monday afternoon.

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