CNS Canada –– Corn and soybean markets look to be rangebound over the next three weeks as U.S. farmers try to get their crops planted, according to a market-watcher.
“We’re slightly behind but that can be made up quickly with the equipment we have,” said Scott Capinegro, president of Barrington Commodity Brokers in Barrington, Illinois.
An oversupply of corn and soybeans has made it tough to be bullish on either commodity right now, he said, especially soybeans.
He believes they could sink as low as $8.85 a bushel (all figures US$).
“If we get all these bean acres planted and even with the 48 yield (the U.S. Department of Agriculture’s long-term yield forecast) which is four bushels less than last year, our carryout will be huge,” he said.
There are also some ideas soybean acres could increase slightly if farmers switch out corn due to the wet spring.
“I can’t be bullish on beans; I don’t see any reason,” said Capinegro.
The $3.50 level is solid support right now in July corn, he said, but it has a chance to go as low as $3.35.
“But then a weather problem occurs and we rally,” he explained. “So we could get a weather bounce.”
December corn could also jump higher, he said, perhaps as high as $4.05-$4.25.
There are some market-watchers who feel corn and soybeans could still pull off a rally, Capinegro said. They point to what happened last year, he said, but added 2017 is different.
“That’s because both Brazil and Argentina had problems last year” he said. “They don’t have problems this year they have a massive crop; that’s the whole darn thing.”
U.S. corn and soybean trade is also predicated on a smooth flow of exports to China — something that could be hampered if there is a significant change in U.S. trade policy.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.