CNS Canada –– Despite a divergence in the two markets on the week, Chicago Board of Trade soybeans and corn are expected to shift back into step, moving sideways to lower in short-term trade, one U.S. analyst says.
Improving South American weather is likely to keep a lid on soybeans, said Terry Reilly, senior commodity analyst at Futures International in Chicago.
“A lot of traders will be watching the rains that occur over Argentina Thursday through Saturday,” he said.
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Those anticipated rains should be welcomed in the country, he added, following hot and dry conditions after flooding earlier in the year.
While Reilly expects the market to move sideways to lower in the near-term, he said prices will see support around $10.10 per bushel (all figures US$).
If values are not able to hold around that level, prices could move back toward $9.95 per bushel.
Since last week, soybean prices have lost more than 18 cents per bushel, closing at $10.3675 in the March contract on Wednesday.
Corn saw some strength in recent sessions, but the grain is not likely to continue advancing.
“The corn market found a little bit of strength in unwinding the bean and corn spreads,” Reilly said.
He expects the grain to stay in a trading range of $3.55 to $3.65 per bushel in the near term.
Longer-term, investors will be watching to see how the U.S. export program fares. If that program looks bullish then values could move to $3.70 per bushel, Reilly said.
Both soybeans and corn could come under further technical pressure in coming weeks, Reilly added.
“The fund managers have basically abandoned a lot of long positions,” he said.
“If they start to unwind the positions a little bit, we could see some pressure on the market.”
Since last week, corn prices have gained two cents per bushel in the March contract, closing at $3.6825 on Wednesday.
— Jade Markus writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
