CNS Canada –– Great spring seeding conditions across much of the U.S. Midwest have weighed on soybean and corn futures at the Chicago Board of Trade — and the nearby bias remains pointed lower, barring a weather scare, according to an analyst.
“The good growing conditions will keep (soybeans and corn) grinding lower,” said Terry Reilly of Futures International in Chicago.
There is always the risk of a weather scare to trigger a short-covering bounce, Reilly said, but slowing demand for both corn and beans would also keep soybeans and corn under pressure.
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Export demand was tapering off for soymeal, he said, while a large U.S. winter wheat crop will soon be undercutting corn demand in the domestic feed market.
July corn was facing a downside target at US$3.50 per bushel, Reilly said, while soybeans could eventually test the US$9 per bushel mark.
Yield and quality concerns with the U.S. winter wheat crop have potential to provide some spillover support for soybeans and corn.
However, Reilly said, any support would be relative, as he said the general path of least resistance was also lower in wheat.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
