CNS Canada — Soybean and corn futures at the Chicago Board of Trade moved lower during the week ended Wednesday, with good crop prospects across the Midwest weighing on values.
With the U.S. corn crop 95 per cent seeded as of Sunday, and over three-quarters of intended soybean acres in the ground, attention in both markets is focused on weather conditions and the developing crops.
“We’ll be trading one weather report at a time, and it will dictate the price movement,” said Sean Lusk of Walsh Trading in Chicago.
Weather conditions were close to ideal across the Midwest for the time being, he said, but added there was a similar scenario in 2012 when the weather turned hot and dry and prices rallied in the summer.
“The fear is always there, that the weather could turn hot and dry, but we’re not seeing it right now,” said Lusk.
Some northern growing areas of the U.S. have been too wet during the spring, which may see some of the unseeded corn acres switched to soybeans, which would be bearish as far as soybeans are concerned and supportive for corn.
From a technical standpoint, July corn has been under pressure, losing over US60 cents since hitting highs near US$5.20 per bushel in late April/early May. Lusk said a retracement higher was possible before the end of June, but added the market will still be highly dependent on weather.
For soybeans, the situation was similar, although old-crop tightness was underpinning the front months. Lusk expected the U.S. was importing more than enough soybeans from South America and Canada to limit the need for demand rationing, but added that fund traders were still “buying the rumour and selling the fact for now.”
The July soybean contract was currently in a range between roughly US$14.60 and $15 per bushel, he said.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.