Winnipeg,(MarketsFarm) – Soybean and corn futures at the Chicago Board of Trade moved off of nearby lows over the past week, with more upside a possibility, according to an analyst.
“In general, with the recovery in energy prices and global markets, we’re seeing a little support come into the agricultural markets,” said Terry Reilly, of Futures International in Chicago.
He said a move by Argentina to increase export taxes on soybeans, and the likely shift in trade flows towards the United States, was underpinning the soy market.
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Improving export demand was also underpinning corn, with a Chinese purchase of U.S. sorghum on March 4 also supportive, according to Reilly.
However, strength in the U.S. dollar index was a limiting factor in the grains, as the rising currency makes U.S. exports more expensive for international buyers.
In addition, shifting sentiment on the COVID-19 coronavirus is “creating a rollercoaster in these markets,” said Reilly on the volatility in the futures. “We don’t know how much it will spread and impact global logistics.”
From a chart standpoint, May corn could move back up into the US$3.90 to US$3.95 per bushel level over the next few weeks “if we continue to see the funds pour money back into the market.” May corn settled at US$3.85 per bushel on March 4.
For soybeans, Reilly saw the potential for the May contract (trading at US$9.0725 on March 4) to trade back up to two-month highs in the US$9.20 to US$9.25 per bushel area.
“I’m a little bit bullish on both markets.”
