Soybean and corn futures at the Chicago Board of Trade both saw some strength over the past week, and could see some additional upside, according to an analyst.
Harvest delays due to poor weather and speculative short-covering accounted for some of the recent strength in the futures, according to Sean Lusk, director of the commercial hedging division with Walsh Trading in Chicago. While the harvest forecasts are improving, he said there were still “enough question marks out there” to keep a bid in the market.
While soybeans have rallied by about 80 cents per bushel off of their lows, they will need additional demand to go higher, said Lusk. He said a trade deal or other surprise could provide that catalyst, but in the meantime attention in soybeans will be on soymeal.
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“The inability for meal to go lower has driven beans up,” said Lusk. “Watching this meal market, there is tightness from a global perspective,” he said adding that the October/November time-frame is usually bullish for meal, which should be supportive for beans.
A move above the US$327-28 per hundredweight level in Dec soymeal contract could see it headed back to US$350, said Lusk. If that happens, beans would also move up, with a upside target of US$9.45 to US$9.50 per bushel in the front month if prices break above US$9.14.
