CNS Canada — Soybean futures at the Chicago Board of Trade moved higher during the week ending Feb. 5, but the market now finds itself at a bit of a crossroads.
Tightening old-crop supplies and good export demand continue to provide support for the front months, but big production prospects out of South America mean the demand will inevitably shift southward.
“One of the things the market is dealing with on soybeans is transitioning from tight old-crop supplies in the U.S…. while also knowing that we have a South American crop coming up that will be large,” said Jon Driedger of FarmLink Marketing in Winnipeg.
Soybeans would be “chopping around” during that transition phase, he said, with the nearby contracts underpinned by good demand but rangebound overall.
“Once (the South American soybeans) start moving with some confidence, it will probably put some pressure on the market,” said Driedger.
Beyond that, spring weather conditions and the annual fight for acres will also soon come to play in the U.S. futures market, he said. He expected soybeans would likely take some area away from corn this year.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.