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Strong Demand To Underpin Soybeans/Corn Amid Harvest Pressure

Winnipeg, MB, Sept. 13, 2017 (CNS Canada), Sep 13, 2017 (Commodity News Service Canada, Inc. via COMTEX) --

Soybean and corn futures at the Chicago Board of Trade will soon be facing seasonal harvest pressure, but good demand may limit the downside this year.

Slight upward revisions to the USDA's yield estimates in the latest supply/demand report weighed on soybeans and corn on September 12, but the soybean losses were completely erased by the close on September 13, while corn also showed signs of stabilizing.

Preston Zacharias, of CHS Hedging's Russell Consulting Group in Minnesota, said the half-a-bushel per acre increases in corn and soybean yields were "ultimately not big adjustments," especially as some weather models were already leaning towards better yields despite the pre-report analyst consensus.

The US corn harvest will pick up over the next few weeks, which should put a bearish slant on the market, according to Zacharias. However, he expected there wasn't much more room to the downside, with December corn likely holding above US$3.30 per bushel.

He added that corn exports might be underestimated in the official data. "There is room for improvement on the export number, which would tighten things up again," said Zacharias.

For soybeans the slight upward revision in average yields was "within the margin of error" and didn't necessitate such a large move in the futures, according to Zacharias.

"Every year we grow a bunch of beans and we find a home for those beans," he said.

He added that there is a lot of pent-up demand for soybeans with large commitments already on the books for September. "We need to pull a lot of bushels out of the farmers' hands to get to the export commitments we think we'll have by the end of December, which could put a logistical squeeze on the market."

Phil Franz-Warkentin, Commodity News Service Canada

Copyright 2017 Commodity News Service Canada, Inc.

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