Corn and Soybean Futures Plummet to New Lows at Chicago Board of Trade

Strategic Insights -

The combination of good harvest progress and better-than-anticipated yield potential has led to significant declines in corn and soybean futures at the Chicago Board of Trade (CBOT). According to industry sources, while additional declines are possible, a Canadian broker specializing in US markets believes that it may be too early to establish a market bottom. The broker predicts that the December CBOT corn contract could test the $1.90 level, while nearby CBOT soybean futures may move down to the $5.40 to $5.35 area in the coming months.

Key Takeaways:

  • The ongoing harvest has pushed corn and soybean values downward, with the December CBOT corn contract potentially testing the $1.90 level.
  • A Canadian broker specializing in US markets believes that the energy sector's demand for ethanol will be a friendly influence on corn prices, but the effects may not be felt until later.
  • Nearby CBOT soybean futures are expected to trade in the $5.50 to $5.75 per bushel range, with a potential move down to the $5.40 to $5.35 area.
  • The downward pressure on soybeans is attributed to large supplies and reduced demand.
  • CBOT wheat futures have been dragged down by the bearish sentiment affecting corn and soybeans, but the losses have been less significant due to the rallies in Minneapolis and Kansas City wheat markets.
  • The broker expects the December CBOT wheat contract to remain below $3.50 over the next several months.

Statistics:

  • CBOT corn contract price: potentially testing $1.90 per bushel
  • Nearby CBOT soybean futures price: $5.50 to $5.75 per bushel
  • Potential CBOT soybean futures price: $5.40 to $5.35 per bushel
  • CBOT wheat futures price: below $3.50 over the next several months
  • Record-sized US corn crop: contributing to downward pressure on corn values
  • Global crude oil prices: increasing demand for ethanol and impacting corn prices

Sources:

  • Dwayne Klassen, Resource News International, WINNIPEG, MB, Sep 29, 2005 (Resource News International via COMTEX)
  • Anonymous Canadian broker specializing in US markets, as quoted in Resource News International, WINNIPEG, MB, Sep 29, 2005 (Resource News International via COMTEX)