MarketsFarm — Soybean and corn futures at the Chicago Board of Trade were testing lows in mid-May but appeared to have found some support for the time being.
“We’re getting a little technical bounce off these lows,” said John Weyer, director of commercial hedging with Walsh Trading in Chicago.
He had expected July soybeans to dip below US$13 per bushel earlier in the week, but the contract has held above that psychological mark so far.
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It was a similar situation in corn, with new-crop futures looking to head below US$5 per bushel at one point before uncovering support.
“We’re going into a holiday weekend,” said Weyer, noting that positioning ahead of the U.S. Memorial Day holiday could add to the ‘ping pong’ activity in the futures. With seeding wrapping up across the U.S. Midwest, attention will shift to weather conditions through the growing season.
“The X-factor has been wheat,” Weyer said, noting the wheat market was seeing some large price swings that were influencing row crops as well. While drought concerns for the U.S. winter wheat crop might make the harvest a writeoff for many producers, reports that China has surplus wheat were bearish on the other side.
Improving moisture conditions for Canada’s wheat crop were also a bit bearish for the U.S. futures, he noted, despite the bullish tilt to the weather in the southern U.S. Plains.
— Phil Franz-Warkentin is an associate editor/analyst for MarketsFarm in Winnipeg.
