CBOT weekly outlook: Further downside ahead for soy, corn

(Lisa Guenther photo)

CNS Canada –– Soybeans and corn at the Chicago Board of Trade lost ground on the week, and harvest pressure could cause further declines in coming sessions, one U.S. analyst says.

Soybeans – Soybean prices settled at a key technical level on Wednesday, which means traders will be closely watching the market for indications on where to move next.

Soybean prices lost 62.25 cents per bushel in the November contract in the week ending Wednesday, closing at $9.43 a bushel (all figures US$).

“I think if $9.43 can hold, if we settle above it, we should get some short-covering,” said Sean Lusk of Chicago-based Walsh Trading.

Investors, he added, are likely to cover positions ahead of key reports from the U.S. Department of Agriculture.

USDA is set to release its world agricultural supply and demand estimates (WASDE), crop production and world agricultural production reports on Sept. 12.

Going forward, if prices move below $9.43, feeling the effects of harvest pressure, then the next support level is between $9.16 and $9.20, Lusk said.

“We’re looking at record production for corn and beans; record yield is staring the market right in the face,” he said.

Corn – Fund-traders are likely to try and even up levels between soybeans and corn ahead of key reports from USDA, which will keep some support in the market, Lusk said.

“They would sell beans and buy corn into those reports,” he said, adding that if projected yields aren’t a major surprise, prices could extend their upside potential.

Corn prices have support levels around $3.08-$3.10 per bushel in the December contract, he said.

Despite some bullish technical features, Lusk doesn’t expect prices to take off, as projections for a large upcoming crop limits the market’s upside potential.

“Until we hit harvest there’s a feeling that everyone is clearing up bin space here, putting pressure on the cash, which leaves the futures under pressure.”

Corn prices lost 20.75 cents in the week ending Wednesday, closing at $3.155 in the December contract.

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

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