Glacier FarmMedia — Nearby contracts for corn, soybeans and wheat at the Chicago Board of Trade appeared to have turned a corner during the week ended Sept. 17.
Tom Lilja, an analyst for Progressive Ag in Fargo, N.D., said weakness in the United States dollar unseen in more than two years helped prices, as well as speculation the Environmental Protection Agency may let more ethanol enter the market.
Declining crop conditions contributed to the rise.
“We’ve seen declining conditions in the eastern Corn Belt … so there’s a thought that the eastern Corn Belt yields could be coming down,” Lilja said.
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The current momentum for prices runs counter to the U.S. Department of Agriculture’s monthly supply/demand estimates released on Sept. 12, which showed upward revisions in projected area and production for corn and soybeans.
“Overall, the report was bearish,” he added. “However, the market is looking at these renewable fuel obligations and these hotter conditions that likely will continue to cut into the final U.S. (corn) yield.”
Lilja also cited the USDA’s weekly export inspections report released on Monday as evidence that lower prices are creating more overseas export demand.
“Those numbers were all above expectations for corn, soybeans and wheat,” he said. “Right now, U.S. corn is competitive with South American pricing,” said Lilja, adding the wheat export pace was the best since 2019 due to “hiccups” with Black Sea exports and attractive U.S. prices.
The U.S. Federal Reserve also cut its key interest rates by 25 basis points on Sept. 17, which may weaken the dollar. However, Lilja said it would only be a minor contributor to prices.
He believes U.S. futures will continue to move up until the soybean harvest advances.
“And the fact we’ve hit technical resistance levels. The only way the soybean market trends higher is if we receive good news regarding Chinese trade,” Lilja added.
December corn moved up 10 United States cents per bushel over the week at US$4.27 on Sept. 17, while November soybeans gained 18.5 cents/bu. at US$10.4375. December Chicago soft wheat advanced 13.25 cents/bu. at US$5.2825, its Kansas City hard red counterpart was up 9.25 cents/bu. at US$5.1625 and December Minneapolis spring wheat was up 4.25 cents/bu. at US$5.7375.
