CNS Canada –– Chicago Board of Trade corn futures stayed mostly range-bound for the week ended Wednesday; the corn market ebbed and flowed with crude oil and ideas of demand.
However, it also felt technical pressure, according to Sean Lusk, a co-director at the commercial hedging services division of Walsh Trading in Chicago.
“Corn keeps heading back towards its lows. We just have oversupply and weak demand; fundamentally it’s bearish,” he said.
A large short position in the market was another feature.
As well, reports from Russia indicate the country is thinking about placing a new export tax on corn and barley to replace one on wheat, according to Lusk.
“It’s been a technical, choppy trade in the corn,” he said, adding resistance (in the March contract) is being felt around the US$3.80 a bushel mark, with support at US$3.64.
As for soybeans, the market saw positive gains made for the week. However, Lusk said values have still been stuck in an 18-cent range.
“Soybeans have experienced a little short-covering over the past two weeks. Funds have reduced their short positions by 45,000 to 50,000 contracts,” he said.
Apart from weather issues, Lusk feels the market could make a surge upward if investors saw two to three weeks of “consistent buying” from China and Japan, the two biggest buyers of U.S. supplies.
Overall demand has been lukewarm at best, which is why a further move down is possible, he said.
“We’re going to watch to see if support holds,” he said, adding that supplies in South America look good.
“Large funds increasing their stake across the board will have an effect. Recent bounces of crude oil haven’t really amounted to anything,” he added.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.