MarketsFarm – Shifting weather forecasts and trade talk rumours should keep the soybean and corn markets at the Chicago Board of Trade on edge over the next few weeks, as participants wait on updated acreage numbers from the United States Department of Agriculture.
The USDA’s August 12 report will include results of an acreage resurvey that should provide a more accurate picture of U.S. soybean and corn area after a late start to spring seeding this year distorted the earlier data.
“The report became bigger once they basically told us not to pay attention to the July report,” said John Weyer, director of the commercial hedge division with Walsh Trading in Chicago. “There are a lot of questions remaining,” he added noting that the updated August report could easily sway the futures sharply one way or the other as expectations are wide-ranging.
In the meantime, “we’ve been trading weather on a near term basis,” said Weyer. While the Midwestern forecasts are generally favourable, markets are reacting on a day-to-day basis to any immediate weather news.
Beyond the weather, the grain and oilseed markets are also keeping an eye on trade negotiations between the U.S. and China.
While trade talks brought some optimism to the futures, “it’s just ‘talk about talk’, with not much substance,” said Weyer.
From a technical standpoint, he placed support in the December corn contract at around US$4.17 to US$4.20 per bushel, noting that the market has come close to that support a few times in recent sessions, but has held so far.
For soybeans, November soybeans see support in the US$8.90 to US$8.96 area. “If it breaks through there, there’s a change going on,” said Weyer.