Glacier FarmMedia – North American weather conditions should become a major influence on the activity in the grain and oilseed markets in the upcoming weeks as farmers turn their attention to spring seeding.
“We’re moving into a weather market here and expect prices to chop around,” said Terry Reilly, senior agricultural strategist with Marex in Chicago. He added that the monthly supply/demand estimates from the United States Department of Agriculture, which will include updated ending stocks forecasts and South American production estimates, could provide some nearby direction before attention returns to the upcoming new crop.
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“The fundamentals haven’t changed that much,” he said, adding that “after we get the report out of the way, the trade will quickly go back to following the weather models.”
Conditions look reasonably favourable for fieldwork across most of the U.S., although some areas remain on the dry side while others may see seeding delays due to excess moisture.
Beyond the weather, sharp strength in the U.S. dollar index on April 10 was a bearish influence for the grains and oilseeds in general.
From a technical standpoint, Reilly said the May soybean contract could test US$11.55 to the downside if planting conditions remain favourable. For corn, he placed support in the May contract at US$4.25 per bushel.
Meanwhile, wheat was caught in two-sided activity, watching European weather and the world balance sheet. Shipping concerns in the Black Sea region were another supportive influence. Reilly expected the May soft wheat contract in Chicago could hold in a range between US$5.50 to US$5.70 per bushel. Kansas City hard red winter wheat moved above some key resistance levels on April 10, and Reilly expected the May contract could trade in a range between US$5.65 to US$6.10 per bushel over the next few weeks.
—Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.
