After recovering off nearby lows, Chicago corn and soybean futures are now waiting on fresh news to push values one way or the other.
With Tuesday’s USDA supply-demand update largely considered neutral, the two markets are now looking ahead to the government’s annual Outlook Forum to be held Feb. 20-21 in Virginia, where the first supply-demand estimates for the upcoming 2020-21 marketing year will be released.
“The downside (in soybeans and corn) is limited until we get on the other side of (the forum),” said Rich Feltes, of RJ O’Brien in Chicago. “On the flipside, any gains will be contained by the fact that South American crop production is improving, and it may be later - rather than sooner - that we see China come in on phase one,” he added.
MarketsFarm Pro analyst Mike Jubinville agreed the looming South American harvest will displace U.S. soybean sales to China for the time being, with any significant U.S. export business to China associated with the phase one trade agreement signed in mid-January likely not coming until September.
Expectations that U.S. farmers will seed more soybeans and corn this spring, as area that was unseeded in 2019 due to adverse weather goes back into production, will also limit the upside potential in the futures, according to both Jubinville and Feltes.
“There’s not a lot for our market to do right now,” Feltes said. “We’re rangebound, marking time and waiting for the next big thing to come.”
He added the next market-moving influence will likely be U.S. spring weather patterns.
Source: DePutter Publishing Ltd.
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