MarketsFarm — Prices on the Chicago Board of Trade will probably continue to climb, especially for corn and soybeans, according to Scott Capinegro of Barrington Commodities.
“The basis remains strong and when the basis is strong, as far as I am concerned, that means the futures should be strong,” he said.
Although CBOT bids have been weaker over the last couple of days, Capinegro said this has been a technical break and the only impediment to prices climbing would be U.S./China trade talks.
“Unless things really collapse with China, I do think we’ve already seen the lows for the year,” he said.
Last week’s supply and demand report from the U.S. Department of Agriculture (USDA) caught many traders off guard and the report pushed up bids on CBOT, Capinegro said.
This year’s harvest will be a long one, due to weather issues and crops being late in maturing. USDA’s November report should have a clearer picture of the 2019 harvest.
Also, Capinegro expects production in North and South Dakota to be lost due to recent snow and rain. The extent of that may not be seen until USDA’s January supply and demand report, he noted.
There are also issues with the South American soybean crop, for which the planting pace has been slow due to dry conditions in parts of Brazil and Argentina. In turn, that delay will likely lead to a later corn crop, Capinegro said.
“There’s a lot of cards finally in the bull’s hand instead of the bear’s hand,” he said.
— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.