CBOT weekly outlook: Market bearish ahead of WASDE

MarketsFarm — Prices for commodities on the Chicago Board of Trade have been “under pressure and on the defensive” due to the lingering trade war between the U.S. and China, improved weather, and an unclear picture of planted acres.

“Less threatening U.S. weather, coupled with the lack of China buying U.S. agriculture products, have definitely pressured prices,” said Terry Reilly, a grains analyst with Futures International.

Demand in the export market has been fairly light, characterized by scattered buying activity.

“Unless weather problems arise, we could see the November soybean contract testing the area below $8.50,” Reilly said (all figures US$).

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Similarly, the December corn contract could trade back below its 200-day moving average of $4.0725, possibly testing the $4 level.

There “isn’t much bullish news in the market” ahead of the U.S. Department of Agriculture (USDA) world agriculture supply and demand estimates (WASDE) report, which will be released Monday.

“That’ll give a much better indication as to how many corn and soybean acres were planted.”

The WASDE will also include the first yield survey of the year, which will indicate to markets how large crops will be.

“We’re looking for a lot of positioning ahead of this report,” Reilly said.

General consensus ahead of the WASDE is that corn acres will be lowered, and soybean acres will increase.

“But with the wide ranges we’re seeing, there are a lot of traders that don’t know what the USDA will be putting out,” Reilly said.

“This is going to be an extremely important report. Monday will rewrite the direction for these markets.”

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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