CBOT weekly outlook: Corn, soy trade watching South America

Reading Time: < 1 minute

Published: December 21, 2017

,

(Lisa Guenther photo)

CNS Canada –– Seasonal holiday trade could lead to some choppiness in the Chicago Board of Trade soybean and corn markets over the next week, although the general bias will likely remain pointed lower in the New Year, barring a weather scare out of South America.

“There’s a reluctance to take on new positions ahead of the holidays,” said Rich Feltes of RJ O’Brien in Chicago.

“Holiday markets are by definition treacherous, because there are fewer players engaged and we’re in a no-man’s-land between the end of the crop reports in the U.S. and the beginning of the most important South American growing season.”

Read Also

Detail from the front of the CBOT building in Chicago. (Vito Palmisano/iStock/Getty Images)

U.S. grains: Wheat futures rise on supply snags in top-exporter Russia

U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.

Managed funds are still holding sizeable long positions in soymeal, which Feltes saw as a possible bearish influence on soybeans if those positions are liquidated.

Also, he noted, the Brazilian soybean crop was improving every day, while U.S. soybean plantings will likely be up in 2018.

“Even though the global demand for beans is admittedly very brisk, South America is capturing the majority of that growth, not the U.S. — our exports are down,” said Feltes.

As a result, he expected South American weather conditions and shifting production estimates out of the region would dictate the movement in soybeans when activity picks back up in 2018.

For corn, attention will be on the U.S. Department of Agriculture’s January crop report. “Big crops typically get bigger,” said Feltes, noting that expected U.S. corn yields keep rising and could do so again in the next report.

— Phil Franz-Warkentin writes for Commodity News Service Canada, a Glacier FarmMedia company specializing in grain and commodity market reporting.

About the author

Phil Franz-Warkentin

Phil Franz-Warkentin

Editor - Daily News

Phil Franz-Warkentin grew up on an acreage in southern Manitoba and has reported on agriculture for over 20 years. Based in Winnipeg, his writing has appeared in publications across Canada and internationally. Phil is a trusted voice on the Prairie radio waves providing daily futures market updates. In his spare time, Phil enjoys playing music and making art.

explore

Stories from our other publications