CBOT weekly outlook: Soy, corn set to move sideways to lower

CBOT May 2017 soybeans, with 200-day simple moving average in red. (Barchart.com)

CNS Canada — As South American supplies put pressure on corn and soybean futures at the Chicago Board of Trade, investors are watching key technical levels in both markets.

Soybeans — Soybean values at the Chicago Board of Trade (CBOT) are likely to trend sideways to lower, said Terry Reilly, senior commodity analyst at Futures International in Chicago.

The market is breaking down below its 200-day moving average. “Really kicked in a lot of fund liquidation, long liquidation,” Reilly added.

South America is expected to produce a record oilseed crop, amid U.S. planting intentions estimates, which sparked that selling.

Financial consulting group Allendale Inc. released the results of its planting intentions survey on Tuesday, with U.S. producers reporting plans for their highest soybean acreage ever.

Allendale pegs U.S. soybean planting intentions at 88.825 million acres in 2017-18.

New estimates could push the soybean market to $9.90 a bushel in the May contract, Reilly said. From there values could test $9.70-$9.75 (all figures US$).

Since last week, soybean prices have lost close to 24 cents per bushel in the May contract, closing at $9.98 on Wednesday.

Corn — Despite CBOT corn’s independent support, prices are likely to decline with pressure from soybeans, Reilly said.

He cited demand from Asia as one factor keeping corn from sharp losses.

“Right now it has a little bit of support due to a pickup in global developments,” he said.

The Korea Feed Association reportedly bought a large amount of U.S.-origin corn, which is bullish, while China is expected to have booked a shipment of the grain for delivery in spring or summer.

Outside of the influence stemming from Asian demand, corn is holding major support at $3.60 per bushel.

“I think if we break below that we’re probably going to trend lower,” Reilly said.

Since last week, corn prices have lost about nine cents per bushel, with the May contract closing at $3.635 on Wednesday.

— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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