CNS Canada — Soybean and corn futures at the Chicago Board of Trade remain rangebound overall, though there may be room to the upside despite the generally bearish underlying fundamentals, according to an analyst.
While large South American crops should weigh on both commodities, U.S. production is still very much in the air as excessive moisture causes problems with spring planting in parts of the Midwest.
“The weather for the next two weeks remains wet and the temperatures remain below normal, which will slow progress,” said Bryan Strommen of Progressive Ag at Fargo, N.D.
“As we move forward, there is some bearish news in the market, but also some opportunities for higher prices.”
The U.S. Department of Agriculture releases its first official crop ratings of the year on Monday, but the latest state data out of Illinois showed the corn crop in that key state at only 44 per cent good to excellent. Strommen said that was the third-poorest rating for this time of year since 1990.
Aside from the possible weather-related strength, there is also some support to be drawn from the technicals. Looking at weekly charts, Strommen said the general trend was pointing a bit higher for both corn and soybeans.
He placed resistance in the July corn contract at $3.94, while a move to $4.04 in the December contract would also likely bring in more selling (all figures US$).
For soybeans, Strommen said most of the attention is now focused on the new crop.
The November contract has tested resistance at $9.70 per bushel on a number of occasions over the past few weeks, but has not settled above that level in 1-1/2 months.
If the contract manages to break higher, the next upside target can be seen in the $9.90-$10 per bushel area.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.