MarketsFarm — Usually at this time of year, the Chicago Board of Trade (CBOT) slips into its holiday lull, with most trading sticking to a sideways range, Scott Capinegro of Barrington Commodities said, suggesting that could change.
“With such geo-political stuff going on and a possible railroad strike [in the United States], it kind of disrupts the flow,” he said.
Capinegro pointed to China and its ongoing struggles with COVID-19 outbreaks– and now a measure of civil unrest there, with protests against the stringent lockdown measures. He warned China might be trying to frontload before the country has its holiday season early next year.
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“They can blow things out of proportion and make the markets break,” he said.
Also, if there is a railway strike in the U.S., even for a couple of days, “it would hurt a lot of things,” he said, as so many products are dependent on rail movement.
Another factor Capinegro said markets will keep an eye on is weather in South America — specifically, how it affects corn and soybean crops.
Also, he said to watch Mexico’s moves regarding its ban on genetically modified corn that’s scheduled to start in 2024. Capinegro noted there have been some sizeable sales of U.S. corn to Mexico recently.
“Buyers could put it in a bin and store it,” he said.
Despite all that’s going on in the world and within the U.S., Capinegro said corn will likely remain largely where it is, “but soybeans are closer to the upper end of a good trading range.
“This wheat break we have had over the last few days has really helped our price in the world,” Capinegro said, noting how little news there currently is of the war in Ukraine.
Capinegro said he expects that pattern to hold at the CBOT following the next supply and demand (WASDE) report from the U.S. Department of Agriculture on Dec. 9, stating “it’s not a real market mover.”
— Glen Hallick reports for MarketsFarm from Winnipeg.
