CBOT weekly outlook: Weather, trade wars keep futures volatile

CBOT July 2019 soybeans (candlestick chart) compared to July 2019 soybeans (orange line chart). (Barchart)

MarketsFarm — Extended durations of wet spring weather continue to buoy prices on the Chicago Board of Trade — and price volatility will remain high based on long-term weather forecasts.

“Whenever you’re in a weather problem phase, volatility tends to increase,” explained Terry Reilly, a grains analyst with Futures International.

Currently, soybeans are trading around the $8.81 range in the July contract, corn is around $4.22, and wheat is at $5 per bushel (all figures US$).

Reilly expected prices to fluctuate more so than has been observed over the past year.

Markets have reacted to United States President Donald Trump’s threat to slap tariffs on Mexican goods by Monday (June 10). Mexico on Tuesday purchased 2.5 million tonnes of corn from Brazil, which Reilly describes as “unheard of.

“That’s pressuring corn markets a little bit,” he said.

The U.S. Department of Agriculture production report, to be released Tuesday (June 11), is also expected to ruffle some traders’ feathers.

“The report could possibly show lower corn planted area and corn yields, which would put production a lot lower than previously predicted,” Reilly said.

“Some traders are looking for a bullish report; some are looking for neutral or bearish.”

Reilly believes corn prices will remain between $4 and $4.50 per bushel.

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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