CNS Canada — Chicago Board of Trade (CBOT) corn and soybean traders are eagerly awaiting the results of a multi-state crop tour, while concerns over Chinese demand are also overhanging the markets.
The Pro Farmer Midwest Crop Tour’s full results are due to be released Friday. So far the tour has been bullish for corn, as early estimates have been lower than those released by the U.S. Department of Agriculture.
On the other hand, soybeans are seeing nothing but bearish factors, said Scott Capinegro, president at Barrington Commodity Brokers.
“Rain makes grain for beans. We got two beautiful systems out there,” he said.
Well-timed rains in the U.S. Midwest on Monday and Tuesday were bearish, as they lent themselves to soybean growing.
Exports for both soybeans and corn to China are below last year’s pace, Capinegro said, and China’s problems are especially problematic for grains. “It’s just not a good thing.”
China’s move to devalue its currency, the yuan, indicates a slowing economy and moves the greenback higher, which makes it difficult for the country to export commodities.
Capinegro pegged corn’s “worst-case-scenario” downside at $3.35 per bushel in the September contract, as a result of harvest pressure (all figures US$).
Corn posted gains of 10 cents per bushel in the September contract over last week’s prices, and the November contract added 10.5 cents per bushel.
If weather in the Midwest continues to be favourable for the rest of the month, Capinegro said, the downside for soybeans could hit $8.70 in the November contract.
Soybean prices slipped by 25 cents per bushel and 11.25 cents per bushel from last week’s prices in the September and November contracts respectively.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.