MarketsFarm — Wheat and corn on the Chicago Board of Trade are likely to fall back in the coming weeks, according to Terry Reilly, senior agricultural specialist for Marex in Chicago.
Soybeans, meanwhile, could go either way, he said, depending on the severity of upcoming weather conditions.
Reilly commented that the December Chicago wheat contract could fall back to the $6.025 per bushel level it hit in May, and possibly tumble down to $5.75-$5.80, should U.S. exports remain sluggish (all figures US$).
“But at some point, U.S. wheat will become a little more competitive against other major exporters,” he added, noting that in the meantime traders are “shrugging off Black Sea headlines.”
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With U.S. corn facing the prospect of increased supplies, Reilly said it hasn’t been surprising to see its contracts hit lows. He suggested the December contract could drop to $4.50-$4.60/bu. within a couple of weeks.
The question for soybeans, he noted, was which way will they go?
Reilly pointed to upcoming hot temperatures and dry conditions for the U.S. Midwest that could adversely affect the critical pod development stage.
“If we do fall a little bit, it could trade down to $13. If we continue to rise a little bit, we might break above that long-term trend of $13.245,” he said, suggesting $13.60 would then be possible.
However, Reilly doesn’t believe the weather will have a devastating effect on U.S. soybeans.
He said soybeans got a good boost from soyoil when the National Oilseed Processors Association issued its July crush report. Not only did NOPA pegged the crush at 173.3 million bushels, which was well above the average trade guess, it said soyoil stocks were tighter than expected. Reilly chalked that up to biofuel production in the U.S. being very robust.
— Glen Hallick reports for MarketsFarm from Winnipeg.
