CNS Canada — Soybeans and corn at the Chicago Board of Trade have been edging higher on investor short-covering ahead of a key report from the U.S. Department of Agriculture.
While trade estimates are bearish for both of those markets, highly-anticipated reports often throw curveballs at investors, one analyst says.
Soybeans – “This report is usually one of the bigger movers, price-wise and news-wise,” said Brian Rydlund, market analyst at CHS Hedging.
USDA is set to release its prospective plantings report Thursday. Ahead of that report, soybeans have been advancing, but those gains are likely not sustainable, Rydlund said, as prices have about run their course.
“Technically it looks like they’ve done everything they needed to do,” he said.
Average trade estimates of USDA projections are at about 83 million acres for soybeans.
“I’ve seen guys think a few more acres than last year, and I’ve seen guys say a few less acres. That’s probably where the curveball is.”
Short covering had propped up the market, but now traders have left those positions, and some have started building a small long position.
“We probably rallied enough,” Rydlund said.
That rally has caused increased farmer selling, which means more beans on the market, which added some pressure.
“We’ve actually seen quite a few beans get sold here in the last two weeks,” Rydlund said.
Since last week, soybean prices have gained US3.75 cents per bushel in the May contract.
Corn – Corn prices have also been trending upward, supported by investor short-covering and tracking soybeans ahead of data from USDA.
But prices lost ground on the week as traders exited positions ahead of Thursday’s report.
“We wait for the report tomorrow to see if there’s any price stimulus in there,” Rydlund said. “Generally I think the trade is not looking for the report to be helpful.”
Average trade guesses for Thursday’s report put corn’s seeded area at about 90 million acres.
Since last week, corn prices have lost 1.5 cents per bushel in the May contract.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.