WINNIPEG – A recent round of contract selling by speculators has created a bearish outlook for corn and soybeans.
Recently, both crops suffered losses after the United States Department of Agriculture released production estimates on Sep. 12 that were higher than expected.
According to a trader in the industry, these and other challenges have painted a bearish picture for the agricultural landscape moving forward.
“The specs have been selling the stuffing out of it, based on an increasingly depressed demand profile, especially on the beans,” explained Jack Scoville of the Futures Price Group in Chicago.
On Sep. 12, the front-month December corn contract opened the day at US$3.6625 per bushel. However, by the close of Sep. 19 that price had dropped to US$3.4575.
Scoville said harvest pressure and the trade war between China and the U.S. were also weighing on the corn market.
The recent USDA production report also pegged corn yields at 181.3 bushels per acre, which was much higher than anyone expected.
“It’s made for a very tough market atmosphere, producers are depressed,” he said.
Soybeans are also facing a hard slog right now, according to Scoville.
“There are people talking about another 50 cents down,” he said, adding his own target for support was US$7.97 per bushel.
He said many elevators don’t want soybeans right now due to the ongoing trade dispute between China and the U.S.
“Between the basis and the flat price futures the market is pretty much shutting down any new sales of soybeans,” he said, adding it would likely stay that way for a while.
On the positive side of things he said soybeans seemed to be getting some technical support that could keep them elevated in the short-term.
“There is a chance US$8.00 could hold the market for a while.”