CNS Canada — Corn and soybean futures at the Chicago Board of Trade recorded losses during the week ended Wednesday, feeling pressure from favourable weather.
Further declines are likely given the nearby forecasts, according to an analyst.
“It’s all about the weather right now,” said Terry Reilly of Futures International in Chicago.
“Over the weekend we got some beneficial rains in some of the dry areas of the U.S., and overnight into today we saw rains shift north into some of the dry areas of the upper Midwest, specifically the northwestern corn belt, which was a little bit supportive for growth development.”
Soybean futures for the August contract closed at $11.15 per bushel on the week ending Wednesday, a 39-cent drop from the previous week (all figures US$). Corn futures fell on the week also, dropping 36.25 cents to $34.15 per bushel for the September contract.
Long-term forecasts show a little bit of ridging coming into next week, but current crop conditions should be able to hold up, Reilly said.
“There is plenty of soil moisture out there to combat any rapid drying we might see from hot temperatures,” Reilly said. “Other than that, the two-week outlook looks pretty good.”
With some widespread commodity selling and the fluctuating dollar, some of the longs are getting out of the market, sending prices below key support levels, he said.
“If the weather holds, I wouldn’t be surprised if August soybeans remain favourable to maybe test the 100-day moving average around maybe $10.05 per bushel,” he said.
If soybeans continue to trade down in August, Reilly said corn should follow suit.
“I wouldn’t rule out $3.25 (per bushel) for the corn market basis the September contract and maybe even a little bit lower than that,” he said.
Good weekly export inspections by the U.S. Department of Agriculture throughout the summer might limit some of the losses in the corn market, Reilly said, due to the stress pull on the Brazilian corn crops that are available for export.
Potential weather problems also could limit losses, Reilly added, but forecasts so far don’t indicate any issues.
— Erin DeBooy writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.