CNS Canada –– Improving weather conditions across the U.S. Midwest weighed on soybean and corn futures at the Chicago Board of Trade over the past week, and further declines are likely heading into the summer months, according to an analyst.
Weather conditions across the Midwest’s corn- and soybean-growing regions have shown some improvement. Terry Reilly of Futures International in Chicago said new-crop contracts should drift lower over the next few months.
“I can’t get too bearish on the old crop, but I can get bearish on the new crop,” said Reilly, noting old-crop soybeans were being supported by tight supplies and the need to ration demand.
July soybeans will be rangebound between US$14.25 and $15.75, said Reilly, although he expected the already-wide old-crop/new-crop spread could widen out even more, with November soybeans moving below US$12 per bushel by mid-summer and below $11 by harvest time, if the weather co-operates.
For corn, he forecast that the July contract would hold below US$5 per bushel, while the December contract will “drift down to $4 to $4.25 (per bushel) by mid-summer.”
The U.S. Department of Agriculture releases its first quality readings on this year’s corn crop on Monday (June 2), and Reilly said it should be two to four points above average in the good-to-excellent category.
“There’s nothing bullish in (the) corn market,” said Reilly, adding that U.S. exports were already slowing down and would slow even more in July and August when Brazil shifts from exporting soybeans to exporting corn.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.