CNS Canada — U.S. harvest operations are just getting started, which should keep soybean and corn futures at the Chicago Board of Trade under pressure over the next few weeks.
Both commodities are expected to “grind a little lower” over the next few weeks, according to Terry Reilly of Futures International in Chicago.
The U.S. Department of Agriculture’s quarterly grain stocks report, due out Friday, could also provide some short-term direction.
“There are a lot of soybeans out there,” Reilly said of the generally bearish tone of the market.
The November contract had room to the downside of about 20 cents (all figures US$), with a test of the $9.40-$9.45 area over the next few weeks a possibility “if weather holds for the U.S. harvest and also South American planting.”
Corn should also see some downward pressure, but not to the same extent as soybeans, according to Reilly.
He placed support in the December corn contract at around $3.45 per bushel, which would be about nine cents below Wednesday’s levels.
“A lack of producer selling in Brazil might underpin prices, and allow for corn to appreciate relative to beans,” said Reilly, adding that Brazilian farmers were currently holding out for higher corn prices.
In addition, while the seasonal trends are pointing lower, “if any weather premiums start to build, it will underpin and counter the harvest pressure,” said Reilly.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.