CNS Canada — Soybean contracts on the Chicago Board of Trade could be poised to rally, if and when China and the U.S. reach an agreement over trade issues.
According to Terry Reilly, a senior commodity analyst with Futures International in Chicago, people are starting to get excited over rumours a deal may be close.
“I think people are getting bullish on soybeans, now that China can come back and buy cargoes for August, September, October and November,” he said.
Everyone will be checking the U.S. Department of Agriculture’s announcement system on Thursday and Friday, he said, to see if China bought cargoes this week as rumoured among some analysts.
If that happens and China turns back to the U.S. for soybeans, Reilly believes the July contract could hit $10.60 or $10.70 a bushel (all figures US$).
As for corn, Reilly said, the market is rising because of stronger wheat prices.
“Also, there are dryness concerns in northern Iowa and (on) the southern Minnesota border that may affect early corn establishment,” he explained.
Meanwhile, the winter crop in Brazil continues to get downsized due to dryness problems.
“I can’t see the market getting below $3.95 (per bushel) if we do trade back below $4,” he said.
Rain is expected to fall in the southeast next week, which could be slightly bearish for the market, he added.
— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.