MarketsFarm — Soybean and corn futures at the Chicago Board of Trade moved off of nearby lows over the past week, with more upside a possibility, according to an analyst.
“In general, with the recovery in energy prices and global markets, we’re seeing a little support come into the agricultural markets,” said Terry Reilly of Futures International in Chicago.
A move by Argentina to increase export taxes on soybeans, and the likely shift in trade flows toward the United States, was underpinning the soy market, he said.
Improving export demand was also underpinning corn, with a Chinese purchase of U.S. sorghum on Wednesday also supportive, according to Reilly.
However, strength in the U.S. dollar index was a limiting factor in the grains, as the rising currency makes U.S. exports more expensive for international buyers.
Shifting sentiment on the COVID-19 coronavirus is also “creating a rollercoaster in these markets,” Reilly said of the volatility in futures. “We don’t know how much it will spread and impact global logistics.”
From a chart standpoint, May corn could move back up into the $3.90-$3.95 per bushel level (all figures US$) over the next few weeks “if we continue to see the funds pour money back into the market.”
May corn settled Wednesday at $3.85 per bushel.
For soybeans, Reilly saw the potential for the May contract (trading Wednesday at $9.0725) to trade back up to two-month highs in the $9.20-$9.25 per bushel area.
“I’m a little bit bullish on both markets.”
— Phil Franz-Warkentin reports for MarketsFarm from Winnipeg.