WINNIPEG — Despite short-term bullish factors in Chicago Board of Trade corn and soybeans, one analyst anticipates prices will be pressured in coming weeks.
To start the week, a turnaround in crude oil markets supported prices, said Terry Reilly, senior commodity analyst at Futures International.
Rebounds in Malaysian palm oil prices are also supportive to soy oil, and better than expected exports to China buoyed near-term soybean prices, he said.
“But in general, we do see a lower trend in prices this week. A good amount of fund short-covering comes into this market,” he said.
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Reilly said weather patterns in the United States and Brazil will keep prices under pressure.
“A good boost in soil levels in South America is optimistic for the upcoming planting season for the beans to go into the ground in Brazil, but Argentina is a bit dry,” he said.
Additionally, Reilly said corn harvest in the U.S. Delta region is coming along nicely.
He pegs the downside targets for soybeans at US$8.55 in the November contract, which settled at $8.7225 per bushel on Sept. 9.
“Then they’ll trade down to the $8.25 area eventually,” he said.
Reilly anticipates December corn will see a choppy trade over the short-term, and prices could break below $3.60 to hit the $3.45 area. The December contract settled at $3.69 per bushel Sept. 9.
Looking forward, Reilly said traders are watching to see El Nino’s effects in agricultural sectors.
“That could cut palm oil production and also bring persistent dryness to Australia and parts of the Philippines as well.”
