MarketsFarm — Soybean and corn futures backed away from multi-year highs during the week ended Wednesday, as investors took profits and weather conditions showed some improvement in South America.
“The technicals are a little bearish for both corn and beans,” said Terry Reilly of Futures International in Chicago.
The managed money long position in soybeans, he noted, was already moving lower the previous week, when prices were still moving higher — a sign of softening interest from speculators.
Dryness concerns in South America have also eased over the past few days and some offshore demand is starting to shift to the continent.
“If we continue to see rains minimize crop losses in South America, we’ll probably see a pullback in beans back to $13.30 in the March (contract),” Reilly said (all figures US$).
For corn, he said, a test of support at $5 was possible.
On the other side, Reilly noted, any declines may trigger some fresh export demand, which would be supportive and slow the losses.
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.
