CBOT weekly outlook: Soybeans likely headed down, corn sideways

CNS Canada –– Corn and soybean futures at the Chicago Board of Trade plunged on Tuesday as fresh estimates hit the market. Near-term, soybeans aren’t expected to improve much, one U.S. analyst said, though a lack of farmer selling could bring some upside to corn.

The U.S. Department of Agriculture (USDA) on Tuesday released its monthly supply and demand report.

“How much more bearishness can we throw at this market? I think it’s just going to be watching how the market reacts,” said Scott Capinegro, senior broker for HighGround Trading Group.

Soybeans –– In its monthly supply and demand report, USDA said soybean supplies are likely up two per cent from October.

“Beans? It’s just a mess of crop,” Capinegro said.

USDA expects soybean production to hit a record 3.981 billion bushels, up 93.6 million on higher yields.

If Brazil also has a big crop, Capinegro said, soybeans have the potential to fall as low as $7.50 per bushel in the January contract (all figures US$).

The good news is that the projection for soybean exports gained with the anticipated additional supplies.

Over the course of the week, soybeans lost 27.25 cents per bushel in the January contract and 31 cents per bushel in the March contract.

Corn — “With farmers doing some holding and not selling their grains they’re definitely going to be above the market on rallies,” Capinegro said.

Though the USDA report was bearish for corn short-term, he said the commodity shouldn’t see drastic downward movement unless the U.S. dollar rallies.

Corn production is expected to be 99 million bushels higher than earlier projections, with the national average yield raised 1.3 bushels per acre, to 169.3 bushels, just 1.7 below last year’s record, according to USDA.

Since last week, corn lost 17 cents per bushel in the December contract, and 18 cents per bushel in the March contract.

Most of the commodity world seems to be either sideways or in a downtrend, Capinegro said.

“I’m a little shocked that they raised the yields this high in November.”

Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

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