CBOT weekly outlook: Weather issues dominate corn, soy in short term

CNS Canada –– Excess moisture across broad swaths of the the U.S. Midwest and southern Plains has dampened the outlook for U.S. corn and soybean crops in the near future.

Both crops finished higher on the Chicago Board of Trade (CBOT) to cap off the week ended Wednesday; however, the current outlook is dim, according to Scott Capinegro of Barrington Commodities.

“The world isn’t going to run out of beans or corn,” he said.

In particular, Capinegro noted, there is a lot of uncertainty over how many soybean acres will actually get planted this year due to excess moisture.

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“Looking at the March 31 planting intentions (report) by the (U.S. Department of Agriculture), there were still three to four million acres that were missing. So do they tack those back on the June 30 report?” he said.

If that scenario were to occur, he said, it would potentially offset the millions of acres of beans that might not get planted because of the rain. “That’s a big question mark.”

Looking at the technical situation, Capinegro said, he believes the wide spread between the July and August soybean contracts can be explained by the record crush over the past two months.

“They’re probably trying to free up some supplies from the farmer,” he said.

Chicago corn contracts are essentially treading water right now, according to Capinegro.

“The U.S. farmer has so much old corn not priced it’s going to hang over the market; world ending stocks are huge,” he said.

As a result, exporters will have to keep pricing supplies on a competitive stance with world competitors.

“So we can get some business,” Capinegro said, adding the situation would be much worse without support from the ethanol sector.

“You can basically say we’re still in trading ranges and we could be stuck in there for the next three weeks,” he said.

Some dry days with temperatures in the 90s F (32 to 38 C) could help the situation, according to Capinegro.

Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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