CNS Canada –– The short-term fate of corn and soybean futures at the Chicago Board of Trade rests on an upcoming supply and demand report, according to one analyst.
Long-term, traders are watching global weather patterns, which could put crops at risk.
The U.S. Department of Agriculture (USDA) will release its monthly World Agricultural Supply and Demand Estimates (WASDE) report on Friday.
“If the USDA report shows that yields are still fairly large in the U.S., we could touch contract lows,” said Terry Reilly, senior commodity analyst at Futures International.
If that’s the case, the November soybean contract could move to $8.50-$8.55, according to Reilly (all figures US$).
On the upside, if yields are down, the November contract could test $9.05 or $9.10.
Since last week, soybean futures lost one cent per bushel in the November contract, and gained one cent per bushel in the January contract.
The corn market has been hovering around the psychological $4 level, and a rally isn’t likely, short-term, Reilly said.
“We’re going to see a little bit of producer selling, which should keep corn in a chopping trading range.”
He pegged that range at $3.85-$4.10 in the December contract over the next few weeks.
Export development in the U.S. is keeping a lid on any potential rallies in the corn market, as exporters have been more focussed on moving soybeans.
Corn gained eight cents per bushel and seven and a half cents per bushel since last week in the December and March contracts.
Traders are watching weather developments to move the market long-term.
Ukraine, Australia and Russia have had unfavourable growing weather, which could prop up prices if it reduces yield, creating more space for U.S. product in global markets.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.