CNS Canada — Soybean and corn futures at the Chicago Board of Trade moved higher during the week ended Wednesday, with soybeans leading to the upside on the back of fund buying.
The May soybean contract moved above $9.53 Wednesday, which marks the midpoint between the highs and lows of the past year (all figures US$).
Now that prices have hit that level, the path of least resistance may turn lower, said Scott Capinegro of Barrington Commodity Brokers in Illinois.
Corn was also running into resistance from a chart standpoint, he said.
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Chicago Board of Trade corn futures extended slight gains on Tuesday as short covering and bargain buying continued to support a rebound from contract lows reached during the previous session.
While the latest strength in both commodities was tied to speculative money, “the fundamentals are still bearish on both” corn and soybeans, Capinegro said.
For corn, the 93.6 million seeded acres forecast by the U.S. Department of Agriculture remains a bearish influence in the background, especially as weather forecasts look good for seeding.
Actual corn area will likely be closer to 92 million, Capinegro said, but “that’s still a lot of corn.”
The possibility of a weather rally through the summer months may provide some underlying support for the two crops, but if that weather scare never materializes Capinegro said corn could go below $3 per bushel.
News out of Brazil also has the potential to move the soybean and corn markets from day to day, according to Capinegro.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
