CBOT weekly outlook: Factors worth watching

Oats showing recent strength

CBOT December 2021 oats (candlesticks) with 20-, 50- and 100-day moving averages (yellow, brown and black lines). (Barchart)

MarketsFarm — Choppiness in Chicago Board of Trade (CBOT) soyoil, a potential increase in corn prices and an upcoming production report from Statistics Canada are factors on which grains analyst Terry Reilly suggests keeping an eye.

Soyoil has been hit by early reports that the U.S. Environmental Protection Agency was going to recommend to the Biden administration that biofuel blending levels be cut from previous years’ levels, said Reilly, an analyst of Futures International in Oakbrook, Ill.

However, that has been countered by strength coming from India — which has opened its borders to increased vegetable oil imports from other countries.

“India is buying whatever it can,” he said.

As for corn, Reilly said there’s the potential for the December contract to rise 10 to 15 cents per bushel prior to a Statistics Canada report and a weekly crop progress report from the U.S. Department of Agriculture (USDA), both of which are due out Monday (all figures US$).

While prices have stayed within a range of $5.30-$5.90 per bushel, he doubts December corn will push above $6. Although U.S. corn conditions have deteriorated this month, the grain analyst said the U.S. will still have a very good crop.

Added to that, he said Brazil will soon plant its next corn crop, followed by Argentina shortly after. The amount of corn to be planted will depend whether both countries receive enough rain to help alleviate current dry conditions.

Reilly said canola production will be down in Canada this year, due the extensive drought that’s affecting the Canadian Prairies as well as the U.S. northern Plains.

While earlier Statistics Canada projections called for just over 20 million tonnes of the oilseed, Reilly said the harvest should reap about 15.4 million tonnes. As well, he expects the Canadian data agency to drop its all-wheat forecast for 2021-22 from around 31.4 million tonnes to 25.4 million.

Reilly also spoke of CBOT oats, which he said has been one of the strongest markets recently; with prices now well above $5 per bushel.

“The majority of the U.S. oats is grown in the Dakotas and they’re still in serious drought conditions right now,” he said adding that market is thin and open to quick movement either way.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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