CNS Canada — Soybean and corn futures at the Chicago Board of Trade have posted solid gains over the past two weeks, but the rally may run out of steam while attention in the markets shifts to spring weather patterns.
“We’ve had a very strong rally since late February,” said Rich Feltes, vice-president of research at RJ O’Brien in Chicago.
However, “we’re now shifting into day-to-day weather mode.”
Improving U.S. spring weather forecasts, the advancing South American harvest, a slowdown in Chinese demand, a firmer U.S. dollar index and the fact that farmers made heavy deliveries in recent weeks were all casting a bearish tone over soybeans and corn, he said.
Feltes expected the nearby bias was lower, but added prices won’t drop back to the lows of late February with recent strength in crude oil somewhat supportive.
The move into a spring weather market also has the potential to provide support if there are any seeding delays or shifting of acres out of corn and into soybeans.
“It will be a day-to-day interpretation of how the models unfold and what the weather maps are telling us,” said Feltes.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.