MarketsFarm — After corn and the soy complex on the Chicago Board of Trade shot up on Tuesday following the fats and oils as well as the crushing reports from the U.S. Department of Agriculture (USDA), one trader said he isn’t expecting any surprises to come out of USDA’s supply and demand estimates or grain stocks report next week.
“I don’t see anything that is going to be shocking numbers,” Scott Capinegro of Barrington Commodity Brokers at Barrington, Ill. said, noting basis levels for corn and soybeans remain strong.
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The only possible way he could see major changes would be if USDA adjusted its yield numbers — something he highly doubts would happen when the reports are released Jan. 12. He suggested the numbers on which to keep a keen eye are the carryovers in the supply and demand estimates.
Support for the upswing at CBOT continued to come primarily from dry conditions in central and southern Brazil, as well as most of Argentina, Capinegro said.
For all of the dryness in Brazil and Argentina, he cautioned, there were more soybean and corn acres this year and regardless of current conditions, both countries are still going to produce large harvests of both.
The only factor that could change those harvests, he said, would be if the drought intensified dramatically during the balance of January.
Based on South America’s dryness and USDA’s Jan. 4 reports, the March contract for Chicago soybeans spiked 34.25 cents on Tuesday to close at $13.8975 per bushel (all figures US$).
March corn, meanwhile, jumped 20.25 cents to finish at US$6.095/bu.
“Plus new money was coming in from the funds this week,” Capinegro added.
There’s been more to the ebbs and flows on CBOT than the usual supply and demand, he said. Inflation also has crept in to boost up prices.
— Glen Hallick reports for MarketsFarm from Winnipeg.
