MarketsFarm — Corn futures at the Chicago Board of Trade hit fresh contract highs on Wednesday, while soybeans also remain well supported with a number of factors likely to keep the grains and oilseeds underpinned going forward.
“It’s never just one thing, a confluence of events have taken us up,” said Sean Lusk of Walsh Trading in Chicago.
Fund traders adding to large long positions, concerns over a late start to spring seeding in the U.S., solid Chinese demand, declining production estimates out of South America and the ongoing conflict in Ukraine were all bullish influences for soybeans and corn, according to Lusk.
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“We’ll need a decent growing year to take off some of the stress that’s been created by the pandemic,” he added.
While a profit-taking selloff is always possible, Lusk expected it would take good North American weather or a resolution to the situation in Ukraine for any downtrend to be sustained. Any dips to date have been shallow and only encouraging more buying interest, according to Lusk.
From a technical standpoint, he placed support in July corn at $7.90 per bushel, with resistance around $8.30-$8.35 (all figures US$). A move above that could see corn test all-time highs near $8.50.
For soybeans, he said the July contract was watching the $17.10 per bushel level as a nearby upside target.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
