Glacier FarmMedia – Soybean and corn futures at the Chicago Board of Trade have both shown some strength over the past week but should be expected to hold relatively rangebound in the short term ahead of acreage data due out at the end of the month, according to an analyst.
Export demand for soybeans from the United States is starting to fade, which could pressure the July/November spreads, according to Terry Reilly, senior agricultural strategist with Marex in Chicago. He added that the medium-term weather outlook was reasonably favourable for the U.S. crop regions, limiting the likelihood of a weather premium.
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“Without a weather premium built into the market, I can’t get all that bullish at the moment… prices could decline from current levels,” said Reilly, expecting two-sided trade ahead of the March 28 acreage report from the U.S. Department of Agriculture.
He expected the planting intentions report would likely see increased corn area from earlier expectations, while soybean plantings should hold steady.
Beyond the acreage numbers, “it will be important to keep an eye on the outside commodity markets,” said Reilly pointing to recent volatility in crude oil. The direction taken by fund traders will also play a key role in price movement. The investment funds were busy covering short positions earlier in March, but it remains to be seen if they will continue to buy back those bearish bets or go back to adding fresh shorts.
— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.
