CNS Canada — Corn and soybean markets appear to be holding firm above major support levels as harvest approaches for much of the U.S.
Futures have actually risen in recent days as large funds cover shorts ahead of next week’s supply and demand report, due out Tuesday next week from the U.S. Department of Agriculture.
One Chicago-based analyst said he thinks the dominant November soybean contract should hang in a narrow range for the time being.
“There’s support for the short term,” said Jack Scoville, a senior market analyst at Price Futures Group in Chicago.
Chinese demand, in recent days, has increased, which also lent support to values.
There is always the chance the market could fall somewhat, but Scoville feels there is enough underlying support to prevent a long plummet.
“We might drift down to $9 briefly but I didn’t think we’ll stay down there for long,” he said, adding it won’t be until October that participants get a true sense of the crop’s quality (all figures US$).
As for corn, Scoville said crop conditions have been good as of late but there are always weather issues to contend with.
“It’s been dry in parts of the Midwest, that’s causing problems with kernel fill and podfilling,” he said.
There is also the chance of a frost or freeze, he added.
“I don’t think the market will go a whole lot lower,” he said. “We have seen some lows for the short term at least until we get closer to the harvest.”
December corn should be safe for the moment at the $3.50 per bushel mark, he said.
— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.