MarketsFarm — Market participants on the Chicago Board of Trade expect agriculture commodity prices to continue to rise in 2021.
Terry Reilly, a grains analyst with Futures International, said corn is expected to hit around $5.25 per bushel, while soybeans will be around $14.50 (all figures US$). The March wheat contract is expected to reach levels around US$7.
Reilly cited concerns of South America’s lack of rain, along with ongoing labour strikes in Argentina, as providing significant strength to soybeans and corn.
Argentina’s dock workers reached an agreement with the government last week, securing raises and danger pay due to the COVID-19 pandemic. However, grain inspectors continue to negotiate, as their protest nears the one-month mark. The strikes have significantly slowed down the movement of grain though the country’s ports.
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Chicago soybeans rose further on Friday to a two-month peak as brisk weekly exports, hopes that China will revert to buying U.S. crops and a rally in soyoil offset supply pressure from favorable U.S. field conditions.
Additionally, some Argentine producers are planning on striking Jan. 11-13, following the government’s decision to temporarily halt corn export registrations.
“The government wants to ensure domestic markets have ample amounts of corn at a reasonable price until new crop corn becomes available,” Reilly said.
“There’s a lot of uncertainty regarding the size of the new crop, so the government wants to see how it shapes up before they start unloading it on to the international market.”
Strength in world vegetable oils, including Malaysian palm oil and sunflower oil, have also supported soybean prices. The March contract closed at $43.68 per pound on Wednesday.
“That’s adding to the bullish undertone for soybeans,” Reilly said.
— Marlo Glass writes for MarketsFarm from Winnipeg.
