CNS Canada — CBOT (Chicago Board of Trade) corn and soybean futures have abandoned fundamental trading in favour of moving alongside macro-markets, which for the most part are bearish.
“It’s not all doom and gloom, but it sure isn’t pretty right now,” said Scott Capinegro, president at Barrington Commodity Brokers.
Outside influencers have been prevalent enough to cause the market to abandon weather trading, on which it typically rests.
Currently, corn and soybeans are affected by global turbulence, driven by currency, stock and crude oil markets.
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“Economic woes from China are just spilling over globally,” said Terry Reilly, senior commodity analyst at Futures International.
Concerns that China will reduce soybean imports are bearish, he said, and energy markets would need to see a recovery for prices to rally.
Capinegro said hot and dry weather in the eastern Corn Belt should have propped up soybean prices, as they are in a critical pod-filling stage, but that didn’t happen.
“People are just so uncertain, and then we wait for harvest to start to hear what the real things are coming off combines,” he said.
Soybeans are currently at their lowest levels in six years, with November soybeans posting losses of nine cents per bushel over the past week.
Capinegro pegged soybeans’ downside target at $8.35 a bushel, but said he thinks if production is high post-harvest, prices could go as low as $8 a bushel (all figures US$).
“I’m not looking for big moves or rallies on grains,” Capinegro said.
If corn gets sold, he said, it could sustain a 10-, 12-, or even 18-cent per bushel move upward, but not much more.
Corn futures lost 5.75 cents per bushel in the December contract from last week’s prices to finish at $3.675 on Wednesday.
Capinegro said he thinks corn could move as low as $3.47, and “worst-case” prices could hit $3.38. “But right now I don’t know what news is going to help this thing.”
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
