Glacier FarmMedia – During the week ended Sept. 24, soybean and wheat futures on the Chicago Board of Trade declined, while corn held rangebound.
December corn was down 2.5 cents per bushel for the week when it closed at US$4.2425 per bushel, but November soybeans lost 34.75 cents at US$10.09/bu. December Chicago soft wheat dropped 8.75 cents at US$5.195/bu., while December Kansas City hard red fell 9.5 cents at US$5.0675/bu. December Minneapolis spring wheat retreated 6.25 cents at US$5.6775.
Jack Scoville, analyst with the Price Futures Group in Chicago, attributed soybeans’ slump due to large crops in the United States and South America, as well as China’s refusal to buy beans from the U.S. He added that China seems to have bought half of Argentina’s surplus and will keep buying from everywhere except the U.S.
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Meanwhile, Chicago soybean futures have dropped to a level where they are already competitive with South American prices.
“Prices are not cheaper than the Argentine (crop) but they are cheaper than Brazilian prices right now. There’s every expectation we’ll see more demand from other (countries), but it’s not going to be nearly enough to make up for the demand from China,” Scoville said.
As for wheat, he cited larger crops overseas.
“(Wheat) prices in Russia have been falling and I think European prices have been under pressure as well … The U.S. has had a decent crop and it looks like Canada’s having a decent crop as well,” Scoville said. “There’s going to be wheat available for North America. Finding a home for it all is going to be key.”
On the flip side, U.S. corn has seen large demand in recent weeks and overseas purchases are expected to continue until the South American crop enters the market. A weaker U.S. dollar has also improved corn’s competitiveness in foreign markets. However, the lofty yield expectations for U.S. corn are not coming to fruition.
“Yields reported in the Midwest are coming in below expectations,” Scoville said. “It’s still going to be a very, very big crop, possibly a record, but not nearly what people were talking about a month ago.”
He predicted soybean prices to fall to as low as US$9.75 per bushel if the situation between the U.S. and China does not change. Meanwhile, corn prices should hold above US$4. Despite their recent struggles, Scoville is a bit bullish on wheat prices.
“We’re past the harvest now … Maybe the US$5.40/bu. area is a possibility. I’m a little bit more optimistic about wheat prices than the rest of the trade.”
