MarketsFarm — Soybean and corn futures at the Chicago Board of Trade are expected to hold relatively rangebound over the next few weeks, although year-end positioning and thinner holiday volumes could lead to some volatility.
General unwinding of spreads and fund profit-taking were weighing on prices in mid-December, Sean Lusk of Walsh Trading in Chicago said.
A move by the U.S. Federal Reserve to take a more hawkish stance on monetary policy, confirmed Wednesday in the Federal Open Market Committee (FOMC), was seen as somewhat bearish for grains and oilseeds, as any resulting strength in the U.S. dollar could cut into export demand.
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As the harvest in southern Alberta presses on, a broker said that is one of the factors pulling feed prices lower in the region. Darcy Haley, vice-president of Ag Value Brokers in Lethbridge, added that lower cattle numbers in feedlots, plentiful amounts of grass for cattle to graze and a lacklustre export market also weighed on feed prices.
Lusk said uneasiness ahead of the Fed announcement had contributed to the profit-taking, with the question now whether the selling pressure would persist.
“At the end of the day, I wonder, are these breaks buying opportunities?” he said.
The most recent crush data for U.S. soybeans, released Wednesday, was a bullish surprise, he added, with soyoil stocks in the country looking very tight.
Looking ahead, Lusk said weather forecasts out of South America have the potential to provide direction for the grains and oilseeds.
The market reaction to developments on the COVID-19 pandemic front could also sway futures, as evidenced by the recent break and then recovery in crude oil when the omicron variant first surfaced.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
