WINNIPEG – Corn and soybean contracts are remaining quiet at the Chicago Board of Trade (CBOT) as traders await United States Department of Agriculture (USDA) reports due out next week.
“(The report is) a big one. I guess most (people are) and I am too looking for a little bit bearish numbers again,” said Scott Capinegro at Highland Trading.
The USDA reports are due out Jan. 12 and cover a variety of topics including crop production numbers, grain stocks, winter wheat acres, price forecasts and international supply and demand estimates. According to Capinegro the reports could have an effect on the markets as trade has been quiet to start off the year.
“We have more funds short than we did last year,” he said, noting that market participants were still trying to break down what those numbers mean.
Seasonally there is usually a bounce in the corn and soybean markets in January and February. However Capinegro thinks the trading range will be tight to start off the year.
“If we do make new lows that could be a buy area again for a bounce, but when you buy these rallies they haven’t fared very well the last couple of months. So you’ve got to be patient and wait for a break,” he said.
As well with the start of the New Year traders are beginning to look towards this year’s growing season and are paying attention to drought maps and forecasts. According to Capinegro there are still chances for spring rains and hopefully above average temperatures heading into April.
“To me that would be a little bit of a signal that something’s going on with the weather here. We’ve had five years in a row that corn has closed lower for the year so I mean things are setting up for a rally,” he said.