WINNIPEG, Aug. 16 (CNS) – Corn and soybean traders continue to assess the fallout from last week’s world supply and demand report from the United States Department of Agriculture.
The monthly report stunned analysts with predictions for U.S. corn yields at 169.5 bushels per acre and soybean yields of 49.4 bu./acre.
“That just destroyed the market,” said Scott Capinegro at Highland Trading, referring to corn.
“You’ve got the month of August here, there’s no heat, you’re catching rain in areas every day, which adds to the bearishness.”
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He said with reports of crop conditions improving through most of the U.S. Corn Belt, the chances for any kind of rally are slim.
He said even if the USDA was to cut its yield estimates in its September report to 166 bu./acre, which would never happen, it would still be too much corn.
Terry Reilly, an analyst at Futures International, said corn yields could be pushed higher in September if current rains boost filling. That would add to downward pressure on prices.
“It’s all weather driven right now,” he said.
Reilly said the November soybean contract could be set back to lows witnessed in June, with strong support coming back into the market at US$9.07 per bu.
During the week ended Aug. 16, the most-active November contract lost 48 cents to end up at US$9.2525 a bushel.
August is a critical time for soybean development as pods are filling and rain now falling in many soybean-growing areas will boost crop conditions, he said.
He said one factor helping to support soybean prices has been Chinese buying, especially for the nearby September contract.
“There’s a lot of strong U.S. demand for both crushing and exports for soybeans,” he said.
But for corn, those buyers aren’t appearing.
Capinegro said corn prices could fall to US$3.45 per bu. down the road and possibly lower with no good buyers in sight.
“There’s chances we’re going right back down to $320, $310 (U.S cents per bu.), those old lows.”
The dominant December corn contract declined by 19.75 cents during the week ended Aug. 16 to settle at US$3.6650 a bushel.
He said the corn market is so bearish that many traders normally would anticipate a bounce, but that doesn’t seem to be materializing, especially as crop conditions improve.
“Everybody is now leaning toward one way, but you can’t fight Mother Nature.”
“It’s depressing. It’s very depressing. There’s really nothing else to say about it.”
