CBOT weekly outlook: South American weather woes lift soy, corn

MarketsFarm — While most of North America is recovering after a deep freeze last week, conditions in South America are still affecting prices in soybeans and corn futures at the Chicago Board of Trade.

Dry weather conditions in southern parts of the continent, along with wet weather in Brazil, have limited both the harvest and transportation of crops, according to Jack Scoville, futures analyst for The Price Futures Group in Chicago.

“Weather has been bad for harvesting in northern Brazil and bad for production potential in southern Brazil and Argentina. That’s affecting both the (soybeans), which are ready for harvest now, and in the south (where) they’re trying to reproduce,” he said.

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Soybeans’ current issues have created a domino effect toward Brazilian corn as well as U.S. crops.

“For the winter corn crop… planting has been delayed because they can’t get the soybeans out,” Scoville said. “That’s really forced demand back to the United States and that’s created the upside momentum in the corn and the beans.”

Wheat, still reeling from the winter cold snap, has seen prices rise due to speculation and technical buying. Contracts for Chicago and Kansas City wheat were trading above the US$680 mark on Wednesday.

However, Scoville thinks the cold won’t be a factor on markets for long.

“Probably the rest of this week. After that, we’ll probably need some news or some other type of demand to really keep this thing going,” he said, adding that wheat production has recently been low in Europe and Russia.

“We’re looking at further gains in the next few days.”

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.

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