WINNIPEG (CNS) – The troublesome weather that gave corn, soybean and wheat contracts at the Chicago Board of Trade (CBOT) a boost over the past week should remain supportive, despite nearby technical setbacks according to a trader.
“I’m still slightly bullish on beans, corn and wheat given the unfavourable weather situation in South America, with too much rain in Brazil slowing second corn crop plantings and delaying soybean harvesting. And then production reductions coming out of the private trade estimates for Argentina,” said Terry Reilly of Futures International in Chicago.
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In Argentina the dry weather has continued with hot temperatures and no rain expected for the foreseeable future in the soybean growing region.
Next Thursday, Feb. 8, the monthly World Agricultural Supply and Demand Estimates report from the United States Department of Agriculture is released. If Brazil’s soybean production numbers are increased, Reilly thinks it could help offset a decrease in Argentina.
The March contract for soybeans was sitting at US$9.9575 per bushel Wednesday. Reilly thinks it will trade up to the US$10.10 to US$10.15 per bushel range. Corn was sitting at US$3.6150 per bushel Wednesday, but Reilly thinks there is an opportunity for it to rise to the US$3.65 to US3.70 per bushel range.
“U.S. corn is very cheap and we’ve seen a good pickup by major importers for U.S. corn recently,” he said, adding traders are looking for a reduction in Argentina and Brazil production numbers to lend support to the U.S. market.
The Chicago wheat market has been supported by a rally in the Kansas City market where declining winter wheat conditions due to dry weather caused an upswing.
“In order to sustain the rally in wheat I think that U.S. exports need to pick up a little bit,” Reilly said.
In Chicago the March wheat contract was sitting at US$4.5175 per bushel Wednesday. Reilly thinks it could remain in a wide US$4.30 to US$4.70 per bushel trading range.
