WINNIPEG (CNS) – Corn and soybean futures on the Chicago Board of Trade softened in value during the week ended May 16 and could be set to drop even more as growing conditions improve in the United States.
Rainy conditions across the U.S. Midwest and U.S. Plains have pressured prices in recent days. The July corn contract sunk below the US$4 a bushel level by Wednesday’s close, while its soybean counterpart was also a touch below the US$10 a bushel mark.
The ongoing trade dispute between U.S. and China has also been weighing on values. But according to Jack Scoville of Price Futures Group, the upcoming meeting between Chinese trade officials and their U.S. counterparts in Washinton could give soybean prices a boost.
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Scoville says support for the July contract lies at the US$9.80 to US$9.90 a bushel.
Meanwhile, falling bean prices in Brazil are creating worries for U.S. exporters.
“The bean prices in Brazil are now below those of the U.S. so we don’t have our natural advantage anymore,” Scoville said.
Fortunately for U.S. exporters, prices for corn in Brazil are holding relatively firm.
Around 60 per cent of the U.S. corn crop is now in the ground. Scoville notes there is still an enormous amount of corn sitting in bins, which will have to be moved.
“Farmers have to sell supplies,” he added.
Support for July corn is around US$3.95 a bushel, according to Scoville, but many buyers are waiting for prices to dip down to the US$3.85 to US$3.90 range.
Going forward corn appears to have more room to the upside than soybeans.
“For this month it looks like the Chinese bean prices are in the tank. So world demand for soybeans could be limited the next few months,” Scoville said.
