Winnipeg (CNS Canada) – The Chicago Board of Trade soybean market is in recovery mode following a wild day where contracts hit nearly a 10 year low.
“It was one of the craziest days we’ve seen in recent memory yesterday. And volume was just absolutely through the roof,” said Terry Reilly, a senior commodity analyst with Futures International in Chicago, Ill.
Markets tumbled on June 19, after United States President Donald Trump announced an additional 10 percent in tariffs on US$200 billion in Chinese imports. CBOT soybean contracts fell abruptly in reaction to the news; corn contracts also took a hit.
On June 20, markets stabilized in overnight trade but were still walking on thin ice awaiting any more trade news.
Reilly doesn’t think it’s all doom and gloom though for the markets. Even if China does reduce its purchases of U.S. soybeans, someone else will buy them, he thinks.
“Export demand should remain fairly in place for U.S. soybeans, especially with prices at these levels. But that doesn’t mean that soybean prices could see additional downward pressure by large spec long liquidation,” he said.
Looking at the nearby August soybean contract, Reilly expects that realistically prices will remain in a US$8.40 to US$9.45 per bushel range.
For the September corn contract, Reilly expects it to hang around the US$3.45 to US$3.75 per bushel trading range for the short term.
Over the next week traders will be starting to position themselves ahead of the U.S. Department of Agriculture acreage, seeding and stocks reports, due out on June 29.
“(Traders will be paying attention to) changes in U.S. weather and also positioning ahead of those reports due out on the 29th, which will be pretty important,” Reilly said.
Traders will also still be following any developments on the trade front.