Glacier FarmMedia | MarketsFarm—Corn and wheat prices at the Chicago Board of Trade (CBOT) were mostly steady during the week ended Aug. 21, while those for soybeans started to move upward.
Jack Scoville of the Price Futures Group in Chicago explained that wheat’s stability was derived from steady prices overseas as well as tepid export demand.
“Our export demand has just kind of been bumping along. There’s no reason to buy based off of increased demand. Even though the potential is there, it has yet to materialize,” he said. “That keeps the market from going up. On the other hand, Russian prices have been pretty stable and that keeps the market from going down.”
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Export demand for corn is improving, mainly due to low prices, Scoville added, but the incoming U.S. crop will put more pressure on prices.
“We’ve got a very big crop coming here. That’s keeping the market from going up. Plus a lot of farmers of both corn and soybeans are sweeping up the bins and getting ready to take in the new crop, and that creates selling on any rally attempts,” he said.
Scoville added that increased demand for U.S. soybeans from China and elsewhere is supporting prices, as well as the fact there are fewer old crop soybeans available than old crop corn.
Reports from the ProFarmer Crop Tour, which takes place from Aug. 19 to 22, showed good yields for both corn and soybeans from Nebraska, Indiana, South Dakota and Ohio. However, Scoville noted the average yields were slightly lower than those projected by the U.S. Department of Agriculture on Aug. 12.
“That might create some stability in prices,” he said.
As for the potential work stoppage for both the Canadian National Railway and Canadian Pacific Kansas City, which could start on Aug. 22, Scoville said while the trade is aware of the effect of a major rail shutdown, it is mostly focused on matters within the U.S.
“If there is a strike, I assume it will create an uptick in our wheat demand here. I think it’s potentially bullish, but even though we know it’s around, we’re kind of concerned about other things,” he said.
Scoville believes grain futures at the CBOT may have already hit seasonal lows and may see some support in the short term.
“We can see corn go towards US$4 (per bushel), maybe a little bit over. We can see (soybean) prices move up towards the US$10.30/bu. area,” he predicted.
