CBOT weekly outlook: Values pull back from upper ranges
Early U.S. estimate of planting intentions due out next week
| 2 min read
CBOT March 2023 corn with 20-, 50- and 100-day moving averages. (Barchart)
MarketsFarm — Despite some bullish influences, commodity prices at the Chicago Board of Trade (CBOT) were stepping back in mid-February. That movement wasn’t a surprise to Scott Capinegro of Barrington Commodity Brokers in Barrington, Ill.
Prices for corn, soybeans and wheat had been at the upper end of their ranges, he said.
“We are still flirting with February and working that average for the crop insurance numbers,” Capinegro said, noting the trade will soon want to test the four-week averages for corn and soybeans.
“We will see what it does from that point on,” he added, not expecting much to happen. “But geopolitical news can change things very quickly.”
The latter would include the Russia-Ukraine war, with both countries geared for spring offensives. Also, the Black Sea grain initiative agreement is set to end in March, with Russia reportedly disinterested in renewing it unless economic sanctions against it are lifted.
As well, drought has continued its firm grip on soybean and corn crops in Argentina and southern parts of Brazil, eroding potential harvests. Drought also has a hold on winter wheat crops across much of the U.S. southern Plains.
Capinegro pointed to the U.S. Department of Agriculture’s annual forum in which it issues its first estimates of planted acres going into the ground during 2023. The Agricultural Outlook Forum is set for Feb. 23-24.
“Pretty much everybody knows we are going to plant more soybeans and more corn than last year,” the broker said.
In 2022, U.S. farmers seeded 88.6 million acres of corn and 87.5 million of soybeans, according to USDA.
Capinegro also cited U.S. corn exports, which have lagged behind last year’s numbers. As of last Thursday, USDA reported year-to-date corn exports at 13.06 million tonnes, down nearly 35 per cent from those a year ago.
Of note, USDA said year-to-date soybean export inspections of 39.54 million tonnes were slightly ahead of this time last year and the 14.29 million tonnes of wheat are slightly behind.
— Glen Hallick reports for MarketsFarm from Winnipeg.
