WINNIPEG, September 7 (CNS Canada) – Corn and soybean futures at the Chicago Board of Trade both recorded gains during the week ended September 7.
Prices were pushed higher as traders prepared for the subcontracts to come off the board next week, however gains are expected to be short-lived, said one analyst.
“I think we’re just seeing a dead cat bouncing, for both (soybeans) and corn we were a little oversold,” said Scott Capinegro, senior broker for HighGround Trading Group in Illinois.
“The rule of thumb is when ending stocks go up, it’s not bullish.”
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Soybean futures for the November contract closed at US$9.7550 per bushel on the week ending September 7, an increase of more than 32 US cents from the previous week.
Rain during soybean harvests could hurt yields in some areas, however yields are still expected to be huge, Capinegro said.
“I still think we’re going to see November (soybeans) in the low US$9.00 to US9.20 (per bushel) range, maybe even US$8.85 (per bushel) with harvest,” Capinegro said.
Corn futures climbed more than 17 US cents to close at US$3.3325 per bushel for the December contract.
“Wherever the September low was, which right now has been US$3.01, I would think that’s a target on the downside for the December corn,” Capinegro said. “We know we have a big crop, I’m not in the 175 (bushels per acre) camp, but I can definitely see it being 171 to 172 (bushels per acre), that’s very possible.”
World production numbers for last week showed new records for corn, wheat and soybeans, Capinegro said, adding he is uncertain on what it will take to stop the grain glut.
“The only way I possibly see changing (the global oversupply of grain) is to drop these markets low enough to discourage some planting,” Capinegro said.
Farmers also have some decisions to make about which commodity they’re going to focus on.
“One of the big problems we’re going to have in the US next year is losing anywhere from two to three million wheat acres for winter wheat…some of that goes into soybeans and some of that goes into corn, and we can’t afford to plant 94 million acres of corn again.”
