CNS Canada — South American weather uncertainty is lending underlying support to soybean and corn futures at the Chicago Board of Trade, with speculators likely to remain on the long side until production issues are more clearly sorted out, according to an analyst.

“The funds don’t want to give up the ship, and there’s enough of a weather concern in there for them to stay long and bid up,” said Sean Lusk of Walsh Trading in Chicago on the buying interest in soybeans and corn.

The U.S. Department of Agriculture releases its monthly supply/demand report on Thursday, and Lusk said positioning ahead of that data contributed to general strength in soybeans and corn.

“It’s all predicated on what’s going on in South America for weather,” he said, pointing to concerns over too much moisture in some areas and not enough in others.

General strength in outside markets, including the metal and energy sectors, pulled the grains and oilseeds up as well, said Lusk.

From a chart standpoint, he said, March soybeans were facing resistance at $10.72 per bushel, with the nearby highs around $10.80 the next target (all figures US$).

For corn, he described the market as “more flat,” with large unsold supplies in the U.S. countryside likely to limit any advances. Farmers remain reluctant sellers for now, but are waiting to sell as the opportunities present themselves.

Looking to the new-crop contracts, Lusk said December corn is nearing major resistance in the $4-$4.15 per bushel area.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.