CNS Canada — The troublesome weather that gave Chicago Board of Trade (CBOT) corn, soybean and wheat contracts a boost over the past week should remain supportive, despite nearby technical setbacks, according to a trader.
“I’m still slightly bullish on beans, corn and wheat given the unfavourable weather situation in South America, with too much rain in Brazil slowing second corn crop plantings and delaying soybean harvesting… and then production reductions coming out of the private trade estimates for Argentina,” said Terry Reilly of Futures International in Chicago.
Dry weather in Argentina has continued with hot temperatures and no rain expected for the foreseeable future in the soybean growing region.
The monthly world agricultural supply and demand estimates (WASDE) report from the U.S. Department of Agriculture is released next Thursday (Feb. 8). If Brazil’s soybean production numbers are increased, Reilly thinks it could help offset a decrease in Argentina.
CBOT March soybeans sat Wednesday at $9.9575 per bushel (all figures US$). Reilly thinks the contract will trade up to the $10.10-$10.15 range.
Corn was sitting at $3.615 per bushel Wednesday, but Reilly thinks there is an opportunity for it to rise to the $3.65-3.70 range.
“U.S. corn is very cheap and we’ve seen a good pickup by major importers for U.S. corn recently,” he said, adding traders are looking for a reduction in Argentina and Brazil production numbers to lend support to the U.S. market.
Chicago wheat has been supported by a rally in the Kansas City market, where declining winter wheat conditions due to dry weather caused an upswing.
“In order to sustain the rally in wheat I think that U.S. exports need to pick up a little bit,” Reilly said.
CBOT March wheat contract sat Wednesday at US$4.5175 per bushel. Reilly thinks it could remain in a wide $4.30-$4.70 trading range.
— Ashley Robinson writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.