Home Argentina market CBOT Agricultural Futures Rise Due To Strong Demand

CBOT Agricultural Futures Rise Due To Strong Demand

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CHICAGO, Oct. 30 (Xinhua) – Chicago Board of Trade (CBOT) agricultural futures rose last week due to strong market demand, Chicago-based research firm AgResource noted.

While advising a bullish outlook, AgResource has also warned that this bull market is maturing as a further rally in the US dollar could help reduce inflationary pressures.

CBOT corn futures ended sharply higher as the market begins to better digest this year’s demand potential. It is becoming increasingly easy to see that the United States Department of Agriculture (USDA) ethanol grinding forecast is 150 million bushels too low, while the FOB rebate of US corn from the original Ukraine bodes well for export demand until early 2022.

The unknown is the USDA November Crop Report. If the USDA fails to increase corn production in the United States, a more bullish price pattern could occur amid improving demand from rising energy prices.

There will be zero tolerance for the La Nina-based drought in Argentina this winter, with even modest losses bringing exporters’ corn stocks / use to a new high. AgResource raised key support for December corn to $ 5.30 and $ 5.40 with a tradable high to be scored early in the coming week.

US wheat futures ended higher this week, with spring wheat futures in Minneapolis hitting well above $ 10. New contract highs were recorded in Kansas and European markets. The extreme strain on exporters’ balance sheets and Europe’s need to slow down future exports are the main price factors.

The long-term outlook remains bullish as record exporters’ stocks / utilization cannot be avoided in 2021-2022. However, the large southern hemisphere crops will hit the world market over the next 30 days, and the burden on northern hemisphere exporters will be eased over the next three to four months. The market must also see the continued interest of importers in current wheat / freight prices to support buyer interest.

As the arrival of southern hemisphere crops and pressure from Russian exporters to shift supply overseas appear to produce higher temporary production, AgResource estimates CBOT wheat could trade in a range of 7.40 at $ 8.00 until more is known about global demand.

Soybeans traded stronger throughout the week and were up 15 cents at Friday’s close. Bids from soy processors are strong as the harvest was slowed by widespread rainfall in the Midwest. Meanwhile, estimated grinding margins average $ 2.3 a bushel in the Midwest.

While domestic processing markets held up, export markets were higher as barge freight rates declined.

While near-term demand looks strong, Brazilian supplies of new crop soybeans stand at $ 0.65-0.85 compared to US supplies in January. As the window for US exports closes a little more each day, AgResource suggests spot sales on rallies to $ 12.70 to $ 12.90 for January soybeans.


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