CNS Canada — A recent round of contract selling by speculators has created a bearish outlook for corn and soybeans.
Recently, both crops suffered losses after the U.S. Department of Agriculture released production estimates on Sept. 12 that were higher than expected.
According to a trader, these and other challenges have painted a bearish picture for the agricultural landscape moving forward.
“The specs have been selling the stuffing out of it, based on an increasingly depressed demand profile, especially on the beans,” said Jack Scoville of the Futures Price Group in Chicago.
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On Sept. 12, the front-month December corn contract opened the day at $3.6625 per bushel (all figures US$). By the close on Sept. 19, that price had dropped to $3.4575.
Harvest pressure and the trade war between China and the U.S. were also weighing on the corn market, Scoville said.
USDA’s recent production report also pegged corn yields at 181.3 bushels per acre, a figure much higher than anyone expected.
“It’s made for a very tough market atmosphere; producers are depressed,” he said.
Soybeans are also facing a hard slog right now, according to Scoville.
“There are people talking about another 50 cents down,” he said, adding his own target for support was $7.97 per bushel.
Many elevators don’t want soybeans right now, he said, due to the China/U.S. trade dispute.
“Between the basis and the flat price futures the market is pretty much shutting down any new sales of soybeans,” he said, adding it would likely stay that way for a while.
On the positive side, he said, soybeans seemed to get some technical support that could keep them elevated in the short-term.
“There is a chance $8 could hold the market for a while.”
— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.
