CBOT weekly outlook: Sideways soy, corn still await spark

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(Lisa Guenther photo)

CNS Canada — Soybean and corn futures at the Chicago Board of Trade are both stuck in sideways trading ranges, looking for a catalyst to break one way or the other.

The U.S. Department of Agriculture releases its latest supply/demand report on Thursday, with the updated production estimates possibly providing that spark.

“If something’s going to happen, it will be on this report,” said Scott Capinegro, of Barrington Commodity Brokers, a branch of HighGround Trading, in Illinois.

However, barring a surprise, Capinegro said slight revisions to U.S. yields, either higher or lower, won’t really matter to the bigger picture.

Beyond the USDA report, South American weather has the potential to provide a market-moving catalyst, with northern Brazil looking dry, while southern Brazil and Argentina are wet.

U.S. harvest delays could also be supportive, but Capinegro added that the crops are still expected to be large overall. Ample carryout supplies from 2016 are also still sitting unpriced in storage, giving end-users little reason to bid up for now.

“The market is starving for any bull news,” said Capinegro. “You have to keep on feeding the bull, but it’s not out there… We need a weather event.”

From a chart standpoint, the front-month corn contract is right about where it was at the same time a year ago.

December corn had at least another US10 cents to the downside, Capinegro said, with the market still in a broad range of about US$3.25-$4.05 per bushel.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

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