CBOT weekly outlook: Corn, soybeans feeling harvest pressure

(Lisa Guenther photo)

CNS Canada — Chicago Board of Trade (CBOT) corn and soybean futures finished lower for the week ended Wednesday as the advancing harvest pressured already-low prices.

The front-month soybean contract dropped to some of its lowest levels in more than six years. The rising strength of the U.S. dollar has made life difficult for U.S. exporters as Brazilian farmers take advantage of a favourable currency exchange to sell cheap supplies of soybeans.

In days to come, investors will watch for an export sales report from the U.S. on Thursday, as well as a U.S. grain stocks report due out next week.

A Chinese delegation is also expected to descend on Iowa this week where a deal is expected to be announced for soybean purchases.

According to Brian Rydlund, a market analyst with CHS Hedging in St. Paul, Minn., some sort of framework for U.S. corn exports to China is also expected to be announced.

“The market is a little bit excited about that,” he said.

As for price, Rydlund said soybeans could still fall as low as $8.25-$8.50 per bushel, in his opinion (all figures US$).

“Some guys have looked at the charts and said we can get under $8 (per bushel). I don’t know if that’s realistic, but beans probably have the more slippery slope ahead,” he said.

Rydlund noted last year’s low price for corn was “around $3.30,” but doubted the price will drift that low in 2015. A downside target of $3.50 may be more realistic, he said.

Yields have been relatively favourable for both corn and soybeans thus far, he added.

“I think we’re starting to get into some of the better stuff right now and I think the yield reports reflect that; granted, it’s real early yet,” he said, adding yield reports in Minnesota and the Dakotas have been very good.

Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow CNS Canada at @CNSCanada on Twitter.

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