CNS Canada — Chicago Board of Trade corn futures chalked up slight gains for the week ended Wednesday, while soybean futures posted steep losses on volatile trading.
Sean Lusk, director of the commercial hedging division for Walsh Trading in Chicago, said there are growing worries about the quality of the corn crop due to excess rain.
Bleaching and disease pressures have both been cited as problems for growers in the eastern half of the U.S. Midwest.
“Weather will remain 90 per cent of the pricing influence; there’s really not a lot of demand in the market,” said Lusk.
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On Friday, the U.S. Department of Agriculture is set to release its monthly World Agricultural Supply and Demand Estimates (WASDE).
“We’ll see what kind of changes are there from June stocks,” said Lusk.
There are particular concerns over the crop in Illinois, he added, as just 60 per cent of it has been rated good or excellent.
Last week’s rally took some key resistance levels out of the market, he said.
“US$4.40 is a key resistance level right now. Longs bailed earlier this week, now we’re seeing the shorts of the market start to bail as well. But the market has done an amazing job of moving from a net short to a net long position here.”
For soybeans, a mass sell-off of Chinese stocks caused many traders to abandon their positions; however, Lusk is optimistic things will improve.
“They still gotta eat,” he said, adding the turmoil in the international markets would get less interesting as the USDA report approached on Friday.
“Global stock markets are on the defensive, but heading into the report, we’re probably looking at two-sided choppy trade coming up,” he said.
“We’ll see what it says, and then focus back to weather unless there is a major percentage drop in the stock market.”
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
