Good weather, looming record harvest weigh on CBOT beans, corn

(Lisa Guenther photo)

CNS Canada — Soybean futures on the Chicago Board of Trade fell lower during the week ended Sept. 3, despite some short-covering near the end of August, according to an analyst.

The U.S. Department of Agriculture on Tuesday released its weekly crop progress report which pegged 72 per cent of the U.S. bean crop as being good to excellent. That was up two percentage points from the previous week.

“When it comes to (November) beans, if they wanted to, they could go down to $9.55 (per bushel), $9.60, before it’s all said and done,” said Sean Lusk, director of commercial hedging at Walsh Trading in Chicago (all figures US$).

At the same time, Lusk doesn’t expect values to creep that low until more information is revealed about the crop. He notes there are already some technical barriers in place at $10.05 and $10.08/bu.

“Strong support will also be felt at the $10 level as well,” said Lusk.

“There is also a story out there that crushers were trying to find beans anywhere they could (a few days ago), particularly in the southern parts of the States,” he said, noting they likely have them now, with harvest underway and beans flowing smoothly out of the Mississippi Delta.

CBOT corn futures were weaker during the week, also feeling the pressure from large global supplies as well as reports of good crop development across much of the U.S. corn belt.

“I just think we’re watching weather, there’s not too much bullish news on the market right now.”

According to Lusk, neither European or U.S. weather models show any significant chances for widespread frost in the U.S. between now and mid-month.

In addition, crop ratings from private companies are suggesting bigger yields than even what USDA has reported. In its weekly crop report Tuesday, USDA pegged 74 per cent of the US corn crop as good to excellent, one percentage point higher than the week before and the second-highest reading since 1994.

“We’re going to trend downwards to $3.45 to $3.48/bu. for corn,” said Lusk, referring to the November contract.

He also noted tension between Russia and Ukraine hasn’t decreased the amount of corn being shipped out of the region. “It seems to be business as usual.”

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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