CNS Canada — Soybean futures on the Chicago Board of Trade (CBOT) were higher during the week ended Wednesday, driven upward by harvest delays over wet weather and sluggish farmer selling.
“These rallies don’t make a lot of sense to me but we were due for a bit of a bounce and I think this is it,” said Brian Rydlund, a market analyst with CHS Hedging in St. Paul, Minn.
Upward motion on charts has prompted many farmers to begin selling their commodities.
Some of the action appears to be coming from other sectors as well, he added. “Maybe it is guys coming out of equities and other financials and getting back into our space.”
So far bean yields have been good, with the eastern side of the U.S. Corn Belt more advanced than the waterlogged western side. “I think all of that improves dramatically if the forecast holds,” he said.
Rydlund added he likes to think corn and soybeans are hanging around the low end of their trading range moving forward.
“But I’m not convinced that is the case with soybeans, especially if South America’s forecast starts to come true and they pick up more rain in the northern parts of Brazil where it’s been dry.”
CBOT corn futures were also stronger during the week, despite continued expectations of a record corn harvest.
“I think the primary driver is weather,” said Rydlund, noting the corn harvest has gotten off to a slow start.
However, with skies expected to clear, he said the harvest should progress and the market will start to feel it.
“I think we’ll see more pressure on the corn market, just because we’ll be getting into the corn a little bit heavier now.”
In coming weeks, Rydlund expects some farmers to complete the lion’s share of the soybean harvest and move onto their corn fields.
By the end of the month, he expects a large portion of the corn harvest will be complete and values will have “changed significantly.”
However, he stressed, it all depends on the rain staying away. “The weatherman can be wrong once in a while. That’s still the primary thing to watch.”
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.