MarketsFarm — Over the last few weeks, soybean and corn prices on the Chicago Board of Trade (CBOT) have stabilized, according to Scott Capinegro of Barrington Commodities at Barrington, Ill.

“And that’s a good thing. Where this goes from here is still anybody’s guess,” he said.

Noting that the crops in the United States are looking pretty good so far this year, Capinegro offered some advice to farmers: “Don’t fall asleep on rallies.”

Although he doesn’t foresee rallies of $1-$1.50 per bushel in soybeans or 40 cents in corn, prices could go up to resistance levels, he said (all figures US$).

Also helping the markets would be the lack of major weather problems at this point, Capinegro mentioned.

“It comes down to the June weather, as crop conditions are as good as you’re going to get. They can only move down a little bit,” he said.

The U.S. Department of Agriculture (USDA) reported Monday that corn rated 74 per cent good to excellent, soybeans at 70, winter wheat at 51 and spring wheat at 80.

As good as things appear to be, Capinegro also pointed to China and media reports that Beijing ordered its state-owned enterprises to stop buying U.S. farm products such as soybeans, corn and pork.

“It’s typical China, they always talk the market down,” he remarked.

Capinegro suspected recent purchases of U.S. soybeans by China were likely private companies, although some media reports indicated state-owned companies also made purchases.

While China has been purchasing more soybeans from Brazil, Capinegro noted the recent shift in the U.S. dollar.

“One of the things now making our beans a little bit more attractive is our dollar broke and the Brazil real has rallied,” he said.

USDA issues its next supply and demand estimates on June 11, but Capinegro said the report will likely not have much effect on the CBOT. Rather, the grain stocks report slated for June 30 could have a major impact as to where prices go.

— Glen Hallick reports for MarketsFarm from Winnipeg.