CNS Canada — Chicago Board of Trade (CBOT) corn and soybean futures saw choppy activity over the past week but large unpriced supplies of both commodities, held by farmers across the U.S. Midwest, will keep the long-term bias pointed lower, one analyst says.
One trader said a lack of fundamental news and strength in the U.S. dollar is why corn was left in a 10-cent trading range last week.
“This corn market is just dead,” said Scott Capinegro of Barrington Commodity Brokers in Barrington, Ill.
The strength of the U.S. dollar is a bearish influence overhanging the market, he said, and it’s been showing on the charts.
“We haven’t traded the 50-day moving average in over five to six weeks. We’ve got so much corn and farmer holding of corn, unpriced, it’s a joke,” Capinegro said.
According to several reports, a lot of U.S. farmers have been forced to store their corn outside with plans to sell it before the weather turns warm.
Capinegro said he’s already hearing concerns about corn quality, noting March planting intentions are just around the corner.
“I don’t know what they’re going to be hanging onto old-crop corn and beans for, but I think they’re going to hang themselves,” he said.
Soybean futures ended sharply higher for the week after a volatile session which was punctuated by a 17-cent advance at Tuesday’s close.
Soggy weather in Brazil set back the harvest a few days while a slowdown in ship-loadings underpinned the market.
Despite the raucous few days, Capinegro said he expects things to settle down from now until the end of the month.
“In (soy)beans we might have seen the highs last night (Tuesday) for the month of February,” he said.
However, Capinegro said, he believes the rally was overblown and the strength of the U.S. dollar will continue to weigh on values.
“I mean, you had a nice rally this month for corn, beans and wheat for the month of February, but we’re still down for the year (beginning Jan. 1, 2015).”
The work slowdown at ports on the U.S. West Coast has been starting to create havoc for many exporters as well.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.