MarketsFarm — Soybean and corn futures at the Chicago Board of Trade posted solid gains during the week ended Wednesday, with the widening inverted spread between old-crop contracts and new-crop months a feature.

“Commercials are buying any dips they can,” Sean Lusk of Walsh Trading said of the market. With the nearby months trading at a premium to the deferred contracts, “the inversion is telling the trade that supplies are tight.”

Farmers with any soybeans or corn still left to sell are generally still holding out for higher prices, which is causing the end users to scramble, said Lusk.

He expected futures would likely remain supported at least until updated acreage data is released at the end of June. While both soybean and corn acres will likely see upward revisions from the March 31 U.S. Department of Agriculture forecast, the current numbers are what the trade will focus on for the time being.

“There are a lot of moving parts here, it’s not just one thing… but the path of least resistance is higher,” said Lusk, adding “they’ll squeeze this thing higher until you get to a level of price discovery where selling emerges.”

From a chart standpoint, Lusk placed resistance in nearby corn futures at $6.04 per bushel, which would mark a 25 per cent increase on the year (all figures US$).

For soybeans, he placed the upside target at $14.25. Moves above both levels would be bullish and set the stage for additional gains.

For new crop, in addition to the actual planted area “the ultimate decider will be weather,” Lusk said.

— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.