CBOT weekly outlook: Soy, corn set to start New Year off weaker

CNS Canada — Fundamental features are likely to pressure technical soybean and corn markets at the Chicago Board of Trade, one U.S. analyst says, keeping a lid on prices into the New Year.

Soybeans — “I’m outright bearish on the beans,” said Preston Zacharias, market analyst at CHS Hedging.

The January contract for soybeans will expire soon, he added, which will pressure values.

“That’s going to be a real magnet for Friday’s trade,” he said.

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CBOT soybeans and soymeal saw sharp declines on Tuesday, pushing past key support levels.

“We did some technical damage to the beans, and probably more importantly to the meal,” Zacharias said.

Declines in soymeal will drag down soybeans, and crushers will start to pay lower values to farmers.

“They’ve been chasing the crush margins. As the crush margins evaporate so do the bids for the beans,” he said.

Since last week, soybean prices have lost close to 17 cents per bushel in the January and March contracts in the week ending Wednesday (all figures US$).

Corn — “I’m just sitting right on the fence about corn,” said Zacharias.

The market is largely rangebound amid a lack of fresh news.

He expected the market to trade in a $3.30-$3.70 range over the next three months.

In the short term, values are likely to feel pressure from increased farmer selling starting in 2017.

Since last week, corn prices have lost about 14 cents per bushel in the March and May contracts.

Looking forward, traders will also be watching South American weather for directional cues in both the soybean and corn markets.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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