Glacier FarmMedia—Soybean and corn futures at the Chicago Board of Trade suffered a profit-taking correction on May 29, as speculative positioning and relatively favourable seeding progress across the United States weighed on values. North American weather conditions through the growing season will likely influence price movements going forward, but the row crops will also be paying close attention to what happens in wheat.
For soybeans, concerns over flooding in Brazil that had supported prices have largely moved to the backburner, with a lack of new crop sales of U.S. soybeans and good seeding progress limiting the upside potential, according to Sean Lusk of Walsh Trading in Chicago.
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U.S. grains: Wheat futures rise on supply snags in top-exporter Russia
U.S. wheat futures closed higher on Thursday on concerns over the limited availability of supplies for export in Russia, analysts said.
He noted that while spring weather conditions were wetter than normal, farmers have been able to seed on time so far. “If you have no demand on top of no weather premium, it will be hard to sustain some bullishness in the market,” said Lusk.
While there is still plenty of time for a weather premium to develop, Lusk expected soybeans and corn could be due for rangebound activity until there’s some fresh news.
“If there’s any story in the market, it’s wheat,” said Lusk, noting that any additional strength in wheat would keep corn supported, which in turn would underpin soybeans.
Recent frosts followed by hot and dry weather has cut into wheat prospects in both Russia and Ukraine, with total wheat production out of the two countries likely to fall below 100 million tonnes, according to Lusk. U.S. and European wheat futures have climbed higher in response to the production concerns. In addition, there have also been rumblings that India may need to import wheat this year. If that happens, he expected the wheat market would get an added boost.
“They won’t be selling anything, that’s for certain,” said Lusk.