CNS Canada — Soybean futures at the Chicago Board of Trade (CBOT) moved higher during the week ended Wednesday, and could be headed above the US$11 per bushel level if weather in the U.S. Midwest stays too wet, an analyst said.
“If weather remains somewhat unfavourable we could see, over the medium term, prices maybe climb up into the US$11.50 area for beans, basis new crop,” said Terry Reilly, senior commodity analyst with Futures International in Chicago.
He also predicted new-crop corn values could continue their recent upward movement into the US$5 per bushel area if weather continues to be too wet.
The shorter-term outlook for both crops is less optimistic, as prices will likely see a bit of a setback after recent advances, he noted.
New-crop values for both crops could also fall in the medium term if weather starts to become more favourable in the U.S. Midwest.
“If weather improves, I expect prices to come off a good chunk in corn, maybe back down to the US$4 level, and for beans, back down to about US$9.55-$9.60 per bushel,” said Reilly.
Other than weather, traders will also be watching crop condition reports from the U.S. Department of Agriculture. Corn values are likely to move lower if USDA keeps conditions unchanged in Monday’s report, according to Reilly.
South American soybean shipments will be a key market mover for soybeans for the rest of the year, as they’ve been picking up over the past several weeks.
“It looks like the tail-end of large South American supplies will be hitting the U.S. market share during the fall quarter, and that’s kind of been beating down the back months relative to the front months in terms of prices,” Reilly added.
Economic developments in China will also be important for both corn and soybeans going forward, as it could result in reduced export demand from the country.
“There’s a possibility a slowdown in the Chinese economy will slow down soybean imports. If that happens, then by Oct. 1, the world will be sitting on record soybean supplies,” Reilly said.
— Terryn Shiells writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.