CNS Canada — Soybean futures at the Chicago Board of Trade (CBOT) moved lower during the week ended Wednesday and could be due for more losses, given the seasonal trends and looming South American crops.
“As long as South America has no real weather problems… it will be hanging over the soybean market,” said Scott Capinegro of Barrington Commodity Brokers in Illinois.
While corn moved off its nearby lows during the week, he said the situation was similar in that commodity, with choppy, range-bound activity and a bias to the downside expected going forward.
“The major trends are down, and I don’t see anything that will change them,” said Capinegro. With the prices looking lower, farmers sticking to the sidelines are generally operating off of what Capinegro described as the “hope marketing plan.”
“What you’re hoping for is an event,” he said, pointing to a weather scare or increased tensions in Ukraine as possible catalysts for a short-covering bounce.
Barring any outside influence, he expected both soybeans and corn would trend lower with the seasonal lows typically coming into place in February. He expected any rallies would be quickly sold and any breaks bought.
Attention should then start to turn toward spring seeding, with the annual fight for acres becoming a bigger factor in the futures.
From a chart perspective, March corn is rangebound with nearby support coming in at the 50 per cent retracement level of US$3.73 per bushel, said Capinegro. If values fall below that, the next support comes in at $3.64 per bushel.
For soybeans, a close below $9.71 per bushel in the March contract would set the stage for a test of the next support at $9.45, said Capinegro. On the other side, the $10 mark now represents solid resistance.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.