MarketsFarm — Prices for soybeans and corn at the Chicago Board of Trade (CBOT) could push higher in the coming weeks, should South America remain dry, according to Bryan Strommen of Progressive Ag at Fargo, N.D.
More and more estimates on soybean production in Brazil have been projecting a much smaller harvest than initially hoped for, he said. In turn, purchases of U.S. soybeans have been increasing over the last 10 days.
“That could be buyers acquiring soybeans in light of a smaller crop in Brazil,” he said, adding that open interest in CBOT soybeans has also been on the upswing.
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“Once we went through $15 per bushel, and looking at the charts, we are open to $16,” he said (all figures US$).
The nearby May contract recently topped out at $15.6825/bu.
However, he cautioned, such an increase would entail open interest needing to hold, along with very little if any profit-taking — and would also require dryness to continue in South America.
That dryness could also lead to reductions in corn production in Brazil and Argentina, Strommen warned. So far, the planting of Brazil’s second corn crop is progressing nicely.
The higher prices between corn and soybeans, could lead to “some acre competition” in the U.S., he said.
“Corn is going to have to stay somewhat firm to maintain their acres,” he said, since fertilizer prices are increasing and soybeans require fewer inputs.
Strommen said the world is going to have to wait and see what transpires between Ukraine and Russia, especially once the Olympics in China end.
He suspects with Russia having deployed a large deployment of troops along the border with Ukraine, that President Vladimir Putin could be compelled to do something. He cautioned that an invasion of Ukraine might not lead to a sharp spike in wheat prices.
— Glen Hallick reports for MarketsFarm from Winnipeg.
