CBOT weekly outlook: Trio of events loom over U.S. soybeans, corn

Glacier FarmMedia | MarketsFarm — The trade’s initial reaction to the re-election of former United States President Donald Trump was bearish for soybeans and corn on the Chicago Board of Trade on Nov. 6. Meanwhile, the U.S. Federal Reserve’s interest rate announcement on Nov. 7 and the U.S. Department of Agriculture’s supply and demand report on Nov. 8 are likely to have a bullish effect on those commodities, said Allendale Inc. president Steve Georgy.

“You look at what’s happening, the effects that Trump could have on the market, especially if he starts talking tariffs again. Those are negative for the grain market,” he stated.

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Chicago Board of Trade soybean futures recovered on Wednesday after sliding earlier to a one-week low as Donald Trump’s victory in the U.S. presidential election fueled concerns over prospects of another trade war with top-importer China.

On Nov. 6, CBOT January soybeans fell back 17 cents at US$9.8200 per bushel and December corn retreated almost four cents at US$4.1425. At the close, soybeans turned around to settle at US$10.0375/bu. and corn was at US$4.2625 as the market’s attention turned to the rest of the week.

With Trump set to be sworn in on Jan. 25, Georgy said any tariffs would be implemented sometime in 2025, with another bearish effect on U.S. soybeans and corn prices.

Well before that, the Fed’s interest rates are widely expected by analysts to be cut by 25 basis points from the current 4.50 to 4.75 per cent. Georgy said that should likely lead to weakening the U.S. dollar.

“Which in turn can be supportive of commodities,” he said as the lower dollar makes exports more attractively priced.

As for the World Agricultural Supply and Demand Estimates, Georgy said ending stocks for U.S. soybeans and corn are set to become tighter due to strong export demand.

In the October WASDE, the U.S. Department of Agriculture put soybean ending stocks 550 million bushels and corn a shade below two billion bushels. Georgy predicted soybeans to drop to around 530 million bushels and corn to fall further below its current estimate.

He stated that he doesn’t believe the USDA will alter their yield projections for soybeans and corn in the November estimates.

“They’re probably going to kick the can until that January report,” Georgy said.

Presently, the USDA has soybean yields at 53.1 bushels per acre, dipping from 53.2 in the September report. Corn yields nudged up in October to 183.8 bu./ac. from September’s 183.6.