CBOT weekly outlook: Corn, soybeans look to wheat for support

CBOT
The Chicago Board of Trade building on May 28, 2018. (Harmantasdc/iStock Editorial/Getty Images)

CNS Canada — Corn futures on the Chicago Board of Trade chopped around for much of the week ended July 25, but could be poised to move higher.

There are ideas a trade deal between the U.S. and Mexico could be reached over some agricultural commodities such as corn, according to Jack Scoville of Price Futures Group in Chicago.

“There are also signs of rising demand from other countries,” he added.

Scoville pegs resistance for the December corn contract at $3.74 and support in the $3.60-$3.65 range (all figures US$).

Uncertainty over near-term weather patterns in the U.S. Corn Belt also lent some support to corn, as well as spillover gains from wheat.

However, Scoville said ongoing trade tensions between China and the United States continue to throw uncertainty into both the corn market and soybeans.

“Soybeans are just kind of caught right now, they are feeling the Trump trade war,” he said.

Demand for soybeans is also under a much heavier weight than corn because of the tariffs China has imposed on U.S. imports, Scoville added.

He pegged resistance at $8.80 per bushel and the nearest support level at $8.52.

Strong condition ratings for the U.S. soybean crop were also dragging on prices, but Scoville says there is still some room to the upside.

“We’re stuck in a trading range but if this market wanted to recover it could go to $9.50 (per tonne),” he said.

He advised traders to keep an eye on the direction of the wheat market too.

“As long as it keeps going up it could raise all ships.”

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

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