CBOT weekly outlook: Corn, soy to weaken as harvest nears

(Allan Dawson photo)

CNS Canada –– Short-term corn and soybean futures have been bouncing due to dryness in the eastern U.S. corn belt, but as crops move into harvest, prices will likely fall, according to Brian Rydlund, market analyst at CHS Hedging Inc.

The corn market is primarily being moved by ethanol bidders and buyers, Rydlund said.

“Export-wise, we remain pretty uncompetitive. I think we’re losing out to cheaper South American supplies, which appear to be ample.”

The situation likely won’t change until the new calendar year, he said.

On the upside, Rydlund said, the December contract could go to $3.85-$3.90 per bushel, which it touched on Wednesday, but it will be hard for the contract to break above $4 (all figures US$).

Rydlund pegged downside targets at $3.65 for the short term. If the crop finishes well, which he said it looks like it will, corn will finish between $3.25 and $3.50.

Prices will likely not sink as low as they did during last year’s harvest, and $3.50 is the working target, he said.

Soybean prices have been supported by demand for old-crop supplies, Rydlund said.

“Export-wise it’s been rather quiet; it really hasn’t been our game here lately but it has been encouraging to see that we apparently are more competitive.”

But in the near term, the soybean market has been more about processor business than exports.

“We like to think the future has some glimmer of hope in it,” Rydlund said.

Soybeans gained four to 9 1/2 cents per bushel over last week’s prices.

From a technical standpoint, he said, the September contract could run into resistance near $9.60 per bushel.

As for the downtrend, he said it will probably continue until it reaches support at $9.

Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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