CBOT weekly outlook: Soybeans moving lower, corn up

(Lisa Guenther photo)

CNS Canada — Soybeans and corn at the Chicago Board of Trade are both stuck in a trading range, one U.S. analyst says.

Neither market is expected to see any dramatic swings on the week, but soybeans have downside potential, while corn could advance.

Soybeans were able to break through a 200-day moving average, but the May contract now looks bearish, said Terry Reilly, senior commodity analyst with Futures International.

“Especially with the talk of some corn acres in the U.S. being switched over to soybeans,” he said.

Light planting delays in southern parts of the U.S. have convinced some producers to switch to soybeans, Reilly added. But the weather forecast for the next couple weeks is favourable.

“So it should be a little bit negative for soybeans for that reason.”

Reilly pegs the price range over the next several days between $8.90 and $9.15 (all figures US$).

Since last week, soybean prices have lost one cent per bushel in the May contract, and a quarter of a cent per bushel in the July contract.

Weak exports have added to soybean’s declines, and will likely pressure the market moving forward, as inspections have been running behind the pace set in previous years.

As of Monday, soybean export inspections were 41.6 million tonnes, compared with 44.9 million in the same time frame the previous year, according to U.S. Department of Agriculture (USDA) data.

Corn became oversold on March 31, when USDA released its Prospective Plantings and Grain Stocks reports, Reilly said.

The market should recover off of those levels going forward. Traders expect corn has lost acres to soybeans, and the seeded area will have declined by one million to two million acres by June, Reilly said.

“Corn is just finding a little bit of support for that reason; short-covering will allow it to trade in a tight range,” Reilly said.

He pegs corn’s range at about $3.50-$3.65 per bushel.

Since last week, corn has lost nine cents per bushel in the May contract, and close to 11 cents per bushel in the July contract.

Corn demand has picked up in recent weeks as Brazil has finished its export program for the country’s first crop, which could also support prices in coming sessions.

However, corn export inspections are down on the year, at 19.6 million tonnes, compared with 23.3 million in the same time frame the year prior, according to USDA data as of Monday.

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

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