Glacier FarmMedia – March grain futures at the Chicago Board of Trade (CBOT) were in decline during the week ended Jan. 31 despite receiving a boost on Jan. 30.
Contracts for corn, soybeans and the three major United States wheat varieties were all lower during the week, mostly stuck in an ongoing grind downwards. However, they were given some relief as corrective buying on Jan. 30 provided some much-needed strength.
Ryan Ettner of Allendale Inc. in McHenry, Ill. said there were still residual effects from the U.S. Department of Agriculture’s January monthly supply/demand estimates released on Jan. 12. In that report, corn and soybean production estimates were raised, causing a bearish reaction in the markets. Low export figures for U.S. wheat have also been pulling prices down.
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“You have larger yield increases for corn and soybeans than expected and at the same time, exports were left alone (in the report),” he said. “I don’t know if exports have really dramatically slowed more than expected recently, but I think the bigger thing is we thought we were ahead of things.”
The U.S. Federal Reserve announced on Jan. 31 that its key interest rate will remain unchanged with the expectation of rate cuts later this year. However, both the Fed’s announcement and the ongoing tensions in the Middle East don’t seem to have any effect on prices, according to Ettner.
One aspect that could affect prices, however, is early harvest reports from South America. Any figures outside trade expectations could pull corn and soybean prices one way or another.
“If there’s any kind of disappointment from early harvest reports, that can make an impact,” Ettner said. But it’s a grind lower unless we hear news otherwise. It’s pretty much the lull we’re in until at least the end of February. Once you move to (multi-year) lows, that grind lower is going to slow down quite a bit. We would slowly pick up exports.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
