Glacier FarmMedia COVID-19 & the Farm

CBOT weekly outlook: Corn, soy at high end of trading ranges

CBOT
(Lisa Guenther photo)

CNS Canada — Corn and soybean futures at the Chicago Board of Trade have moved to the high-end of their trading ranges, as the U.S. Department of Agriculture left ending stock estimates little-changed.

“Looks like we’re still trading ranges, but we’re back up to the top,” said Brian Rydlund, market analyst at CHS Hedging.

Corn and soybeans are trying to poke through resistance levels due to a seasonal rally, he added.

Corn prices have hit their bottom, and are moving near their first resistance level: US$3.60, in the May contract.

USDA’s world agricultural supply and demand estimates (WASDE) held little fresh news for the corn market.

Domestic corn stock estimates by USDA were in line with February’s estimates of 24.5 million tonnes, and world ending corn stocks were lowered to 207 million tonnes from 208.8 million tonnes.

“The numbers were pretty much right on from last month, which made them probably a little smaller than the average trade guess,” Rydlund said.

“So I guess if you went with that it’s a maybe a titch friendly,” he said.

Since last week, corn prices have gained 3.25 cents per bushel in the May contract, and 3.75 cents per bushel in the July contract (all figures US$).

Rydlund expects prices could edge higher, but won’t see any significant rally until South America finishes harvest.

“Until those guys are done it makes it a little tough for the U.S. right now.”

Soybean grower selling increased over the course of the week as prices rallied, Rydlund said.

“We saw the U.S. farmer sell some beans for the first time where it was noticeable, so that was encouraging to see.”

Since last week soybean prices have gained 24.25 cents per bushel in the May contract and 23.5 cents per bushel in the July contract.

While soybeans prices have moved higher, the long-term trend is lower, Rydlund said, as beans are in the process of building supply.

“I would expect that you won’t trade a lot of US$9 futures in that scenario, and you’ll probably trade something that starts with a seven by the end of summer.”

USDA’s projections for domestic soybean stocks were slightly higher than February’s estimates, at 12.5 million tonnes while global soy stocks were pegged at 78.9 million tonnes.

Weather is key in both the corn and soybean markets, Rydlund said, adding that traders are watching for a USDA prospective plantings report due out on March 31.

Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting. Follow her at @jade_markus on Twitter.

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