CNS Canada –– Corn futures on the Chicago Board of Trade appear poised to fall lower in the days to come, after a surprising week in which values jumped around 18 cents per bushel.
“Price-wise, if you look at the charts, we are high up on some ranges, too high for the moment,” said Brian Rydlund, a market analyst with CHS Hedging in Minneapolis.
The last few weeks have seen steady showers frequent the U.S. Midwest, delaying harvest in several states.
However, Rydlund noted, the skies have been much clearer recently and have given farmers a chance to get back on their fields.
“As people get more and more into the corn harvests, the yields look like they’re improving, (especially in) the upper Midwest,” he noted.
Rydlund said he has more faith in corn’s ability to ride out bearish factors, compared to soybeans’.
On Wednesday (Oct. 12), the U.S. Department of Agriculture is scheduled to release its monthly world agricultural supply and demand estimates (WASDE). That will be a key factor dictating where prices will go, he said.
“The trade is generally looking for soybean yields to go up. Everyone I talk to is very impressed with bean yields, well above what they normally average and well above last year’s record crop.”
The current $9.60-$9.70 range for front-month contracts seems overpriced, he said.
“It seems a little high relative to what we’re hearing,” he said, adding that there’s probably a greater downside risk in the days to come.
Front-month soybean contract rose 11 cents per bushel during the week ending Wednesday. The rise would have been even greater if not for selling on the final day, as rumours grew USDA would likely raise its projections on Oct. 12.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.