MarketsFarm — Just as the United States enters its holiday season, starting with Thanksgiving, one analyst said movements on the Chicago Board of Trade (CBOT) will most likely be sideways for the balance of 2021.
“There’s good weather in South America, maybe too much rain in Australia. We have to remember rain makes grain,” Bryan Strommen of Progressive Ag at Fargo, N.D. said.
Reports out of Brazil and Argentina have pointed not only to sizeable corn production come 2022, but also to record soybean production in Brazil and a hefty crop for its southern neighbour.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Meanwhile, wet conditions in parts of Australia have eroded the quality of its wheat harvest.
Strommen said the wheat complex has been on the rise recently, due in part to sharp upticks in Paris wheat futures that have hit new contract highs. However, at mid-morning on Wednesday, Chicago, Kansas City and Minneapolis wheats turned sharply lower, which Strommen chalked-up to profit-taking.
With the lead-up to Thanksgiving, he said, there will be thin volumes of trading — and he noted December options expire at the close on Friday.
Strommen explained he doesn’t expect any substantial movement either way at the CBOT until after New Year’s.
“We’ll have some bigger reports here in January. I don’t think the bottom falls out a bit, but I don’t see a reason for the markets to run extremely higher into the end of the year,” the analyst said.
Come January, the U.S. Department of Agriculture is scheduled to release its monthly supply and demand estimates on the 12th. As well, USDA will issue its initial crop projections for 2022 that month.
— Glen Hallick reports for MarketsFarm from Winnipeg.
