CBOT weekly outlook: Corn, soy trade up, but fundamentals bearish

CNS Canada — Despite short-term bullish factors in Chicago Board of Trade (CBOT) corn and soybeans, one analyst anticipates prices will be pressured in coming weeks.

To start the week, a turnaround in crude oil markets supported prices, said Terry Reilly, senior commodity analyst at Futures International.

Rebounds in Malaysian palm oil prices are also supportive to soy oil, and better-than-expected exports to China buoyed near-term soybean prices, he said.

“But in general we do see a lower trend in prices this week; a good amount of fund short-covering comes into this market,” he said.

Weather patterns in the U.S. and Brazil will keep prices under pressure, he said.

“A good boost in soil levels in South America is optimistic for the upcoming planting season—for the beans to go into the ground in Brazil, but Argentina is a bit dry.”

Additionally, Reilly said, corn harvest in the Delta region of the U.S. is coming along nicely.

He pegged the downside targets for soybeans at US$8.55 in the November contract, which settled Wednesday at US$8.7225 per bushel. “Then they’ll trade down to the US$8.25 area eventually.”

Reilly said he anticipates December corn will see a choppy trade over the short term, and prices could break below US$3.60 to hit the US$3.45 area. The December contract settled at US$3.69 per bushel on Wednesday.

Looking forward, Reilly said traders are watching to see El Nino’s effects in agricultural sectors.

“That could cut palm oil production and also bring persistent dryness to Australia and parts of the Philippines as well.”

Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

 

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