CNS Canada — It’s a fluid set of circumstances for the U.S. soybean market these days as U.S. negotiators head to China in a bid to get proposed tariffs lowered on U.S. imports — but the potential for any major rally appears limited.
“I would say the beans have a more limited upside than the corn does,” said Jack Scoville of Price Futures Group in Chicago.
The North American Free Trade Agreement is another important issue for agricultural markets, according to Scoville, as it could affect demand in a major way.
Weather remains the key fundamental for farmers, though, as cold spring temperatures finally start to disappear.
“Here in the U.S., farmers are really starting to get the crop in pretty hard,” he said, adding that planting could intensify even more once this week’s rains are over.
Brazilian selling is another factor weighing on soybeans. Scoville put key resistance at $10.63 a bushel for the July contract and said floor support could be as low as $10.20 (all figures US$).
The corn market is also keeping its eye on U.S. trade relations but is also enjoying some technical support, according to Scoville.
“Corn will try to hang onto $4,” he said. “There’s actually some good support there.”
The July contract could even take a run at the $4.35 mark in the next couple of weeks, he said.
“Even though farmers are thought to have a lot of corn, they’re not offering it right now, which is helping the market; they’re too busy farming.”
— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.