Glacier FarmMedia — Soybean, corn and wheat futures all came under pressure to start 2024, with the path of least resistance pointing lower still despite the potential for some end-user bargain hunting.
“Overall, I remain bearish on corn, wheat and beans… because the balance sheets seem to be a little bit heavy,” said Terry Reilly, senior agricultural strategist with Marex in Chicago.
“The Brazilian forecast hasn’t really changed, and recent rains will limit any further crop loss,” said Reilly, noting that the improving moisture conditions in Brazil were pressuring the soy market especially.
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However, he added that traders were still trying to get a better handle on the actual soybean production out of Brazil, with that uncertainty likely to sway prices through the South American growing season.
From a technical standpoint, the sharp drop in soybeans to start the New Year created a gap in the chart between US$12.9075 and US$12.9675 that could be seen as an upside target for a possible correction. Reilly expected filling that gap could take some time though, especially as Chinese buying has cooled off for the time being.
For corn, prices have consistently settled below key moving averages, which Reilly saw as a bearish sign.
Wheat remains stuck in a sideways trading range, with the focus on global demand and tender announcements. Reilly said uncertainty over movement through the Black and Red Seas was keeping some caution in the wheat futures.
— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.
