CBOT weekly outlook: Corn, soybean prices expected to rise

(Lisa Guenther photo)

CNS Canada –– The ongoing U.S. harvest has pressured CBOT corn and soybeans in recent sessions, but support for the commodities will ramp up long-term, moving prices higher, according to a U.S. analyst.

“I think you’re going to see demand improve and you’re going to see weather problems in South America emerge,” said Sean Lusk, director of commercial hedging at Walsh Trading, Inc.

Soybeans fell four sessions in a row on optimal harvest progress, in addition to better weather in South America.

The market has since recovered the past two days, and the longer-term outlook for soybeans is bullish, especially as a strong El Nino brings dryness to growing regions.

China’s interest in the oilseed is another factor keeping the soybean market strong.

“They continue to overbuy U.S. beans for future shipment, so we’re kind of looking at this as a long-term buying opportunity, given perceived weather troubles down the road,” Lusk said.

Since last week, soybeans lost 5.25 cents per bushel in the November contract and 4.75 cents per bushel in the January contract (all figures US$).

Corn has been bearish short-term, and has seen turbulence in recent sessions, but Lusk said things should improve moving forward. “Corn has been taking it on the chin.”

And the biggest blow came from the rapidly-progressing U.S. harvest.

Demand for corn is weak, Lusk said, but he thinks export numbers will start to support the commodity. El Nino serves to prop up the corn market as well.

“It would be classic, not only short-covering, but we’re going to see a lot of spec buying pushing corn up.”

Corn was mixed on the week, with strength in nearby months. The December contract gained 1.75 cents per bushel, but the July contract lost 1.25 cents per bushel.

Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

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