CBOT weekly outlook: Soybeans, grains looking bearish to start 2024

Corn consistently below moving averages a bearish sign says analyst

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Published: January 3, 2024

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Photo: Getty Images

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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Corn bids and offers have lately been far apart, with bids generally a dollar or more below the C$12 per bushel Ontario farmers would like to see. Photo: iStock/Getty Images

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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.

About the author

Phil Franz-Warkentin

Phil Franz-Warkentin

Editor - Daily News

Phil Franz-Warkentin grew up on an acreage in southern Manitoba and has reported on agriculture for over 20 years. Based in Winnipeg, his writing has appeared in publications across Canada and internationally. Phil is a trusted voice on the Prairie radio waves providing daily futures market updates. In his spare time, Phil enjoys playing music and making art.

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