CBOT weekly outlook: Corn expected to move higher, soy sideways

(Lisa Guenther photo)

CNS Canada –– Corn futures at the Chicago Board of Trade have a bullish tone, according to one analyst, while soybeans are trading sideways to slightly higher.

But any anticipated gains could be taken away as quickly as they come, by turbulence in outside markets.

“I think there’s an opportunity to buy corn and sell beans,” said Terry Reilly, analyst with Futures International.

Both corn and soybeans have upside potential, Reilly said, but he doesn’t discount the idea that lower crude oil futures could keep a lid on gains in agricultural markets.

Another influencer in both markets is South America’s harvest. “Traders are seeing if the harvest delays are going to materialize through the remainder of the week,” Reilly said.

Since last week corn has gained 10.75 cents per bushel in the March contract and 10.25 cents per bushel in the May contract (all figures US$).

Drought in South Africa could bring even more upside to corn, Reilly said.

He pegged the March contract’s downside target at $3.60, and the upside at $3.80.

South Africa saw the driest year on record in 2015, which has caused production declines, and will likely spur increased imports, which is bullish.

Since last week, soybeans have lost 5.25 cents per bushel in the March contract, and 1.75 cents per bushel in the May contract.

“If we can see past the additional pressure in the outside markets we can maybe move higher,” Reilly said.

If outside markets improve generally, March soybeans could move to $8.90, and hit $9 by expiration.

Reilly said he expects increased export commitments to China going forward, despite economic slowdown, as the country is reliant on oilseeds.

Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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