MarketsFarm — Harvest operations for soybeans and corn are in their early stages, with seasonal selling pressure likely to limit any upside potential in the futures markets over the next few weeks.
However, both commodities have found nearby support on the other side keeping values rangebound overall.
The U.S. soybean harvest was 12 per cent complete as of Sunday, up one point from the five-year average, with corn running two points ahead of average at 15 per cent done, according to the latest U.S. Department of Agriculture data.
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After briefly trading below the $13 per bushel level for a few days, the November soybean contract has corrected back above that psychological level, which should provide nearby support (all figures US$).
Meanwhile, December corn touched a session low of $4.6775 on Sept. 19 but has since moved nearly 20 cents off that level.
A rally in crude oil was cited as a major supportive influence in both commodities on Wednesday, with oil at its highest level of the past year. Continued strength in energy markets should underpin the agricultural futures, with harvest conditions also being followed closely.
Forecasts calling for more rains in parts of the U.S. Midwest over the next week supported the futures on Wednesday, given the possibility of harvest delays in some fields. However, the moisture may still be beneficial to any crops still developing.
USDA on Friday will release quarterly stocks data as of the beginning of September, with average trade guesses calling for a downward revision to U.S. soybean ending stocks from the government agency’s most recent forecast and a small increase in the corn carryout. Any surprises in the data could provide some direction in the futures.
— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.
