CNS Canada — Chicago Board of Trade corn and soybean futures saw choppy activity over the past week as traders had spent much of the period positioning themselves ahead of the release of the U.S. Department of Agriculture’s prospective plantings report.
That choppiness is expected to continue as the market digests the report’s data and turns its attention to actual seeding conditions.
USDA on Tuesday pegged 2015-16 U.S. corn area at 89.2 million acres in its report; pre-report guesses had called for a figure closer to 88.7 million.
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Corn futures finished the week ending Wednesday roughly 13 cents lower than when they entered, sitting well off the psychologically-important US$4 a bushel mark.
However, as the dust settles in the wake of the report, one analyst said he expects corn to start testing higher.
“I get the feeling corn’s going to (eventually) push higher,” said John Weyer, a commercial hedging director with Walsh Trading in Chicago.
He explained weather issues could be one reason, as excess moisture in the U.S. Midwest could easily slow down planting efforts.
If that or another weather-related event discouraged corn planting any more, US$4.20 could be the new target, post-planting.
At the same time, he acknowledged the market could be tested to the downside before that occurred.
“I wouldn’t be surprised to see corn take a dip further first, and then we could it being pushed towards US$4 again,” he said.
It was a volatile week for soybeans as the USDA report showed a record year for acreage in 2015. However, the 84.6 million-acre projection was still below what many analysts had expected.
Weyer said the period leading up to the Easter long weekend and the day following it will be key in charting the way forward for beans.
“A lot of information still needs to be taken in and digested. It’s also a holiday market; you want to see how the market reacts a day or two afterward,” he said.
Investors should also pay attention if prices temporarily creep outside their recently-established trading range over the next few days, he said.
“Anywhere we trade in the next day or two, outside the ranges, we may find ourselves (returning) there,” he said, adding values could hit US$10 a bushel in the next day or two.
“If we did (hit US$10), I think it might be (Thursday) on a light-volume trading session, ahead of the holiday, in order for that to happen.”
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
