CNS Canada — Soybean futures on the Chicago Board of Trade came off their highs during the week and could be poised for further losses, according to a trader.
The most-active May contract recorded a high of $10.77 a bushel on March 7 but ended at $10.32 at Wednesday’s close (all figures US$).
Jack Scoville of Price Futures Group in Chicago said a lot of the bearishness is tied to the fact most believe the crop in Argentina has run its course and recent rains, such as those over the weekend, can only serve to heighten the pressure.
“Because it is so late,” he said. “We’re going to start to be more focused on demand.”
Chinese buying of U.S. soybeans is on the softer side right now, too, and there are ideas the Asian giant may cut back on future orders due to trade issues with the U.S. government.
“I think we’re running out of time on the beans; it’s been a nice run though,” he said.
However, he said, the outlook for corn is much more bullish. He pegged the next level of resistance at $4.07 a bushel.
“I think we’ll see selling once we get up there,” he said.
Demand for ethanol and livestock feed are helping prop up the market along with some weather issues in South America.
As well, he says the buying has intensified whenever corn breaks above certain technical levels.
“For instance, we bought a lot of corn at $3.72 (per bushel) in the March contract,” he said.
Going forward, he said, traders will be focused on the release of Thursday’s export sales report from the U.S. Department of Agriculture.
“Soybeans had a big week last week and we’ll see if they can follow through,” he said.
At the end of the month, the quarterly stocks report will be released, which according to Scoville will be a “market mover” as it will contain a key planting intentions report.
— Dave Sims writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.