CNS Canada — Chicago Board of Trade corn and soybean markets drifted lower during the week ended Wednesday and are expected to remain under pressure in coming weeks.
The softness in both markets is likely because of large domestic and global supplies for corn and soybeans, said Ken Ball of PI Financial in Winnipeg.
“Buyers see unlimited supplies for the foreseeable future, and aren’t interested in pushing the market (higher) at all,” he added.
The U.S. produced very large corn and soybean crops in 2014-15, as did South America. Both commodities should see sizeable production in the U.S. for 2015-16 as well, as acreage is expected to be big and weather conditions have been favourable.
“They’re getting close to ideal weather in the U.S.,” Ball added.
With an earlier start to spring seeding than normal in the U.S., most intended acres are likely to go in for both corn and beans, analysts say, with significant progress already made as of late May.
The U.S. Department of Agriculture reported 92 per cent of corn was in the ground as of Sunday, as were 61 per cent of soybean acres, both ahead of the average pace.
What’s been planted is doing well, thanks to timely rains in many regions, though there have been concerns about too much moisture in some regions.
USDA released its first crop condition ratings for corn during the week, noting 74 per cent was in good to excellent condition.
While corn and soybean futures will take direction from the usual suspects, such as the U.S. dollar, demand news, and outside grain and oilseed markets, weather conditions in the U.S. will be the biggest influence throughout the summer.
Good weather during the growing season will keep prices under pressure, while any scares could spark a rally in the futures.
Weekly crop condition reports, export sales data and monthly supply and demand reports from USDA will all be watched closely as well.
— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.