CHICAGO, Feb. 4 (Xinhua) — CBOT agricultural futures were higher last week after China returned from its Lunar New Year holiday, Chicago-based research company AgResource noted Saturday.
Although there was not a sizeable increase in demand for Chinese commodities, AgResource remains bearish on corn, soybeans and soymeal.
CBOT corn futures were mixed this week, with December contracts gaining on March contracts. The market is pretty close to extreme supply tightness.
A neutral and complex market is anticipated into early spring. The long-term outlook remains bearish amid high odds of favorable Northern Hemisphere weather and record large production in Brazil this summer. The complete lack of global demand growth remains a primary concern.
It is clear the market is unable or unwilling to add a risk premium at 6.85-6.95 dollars as ethanol margins retreat, livestock numbers continue to erode, and wheat competes for feed use in the United States and Europe.
U.S. wheat futures ended higher for a second week amid moderate-fund short covering from major chart-based support. It is difficult to be overly bearish in wheat given that funds still hold a decently sized net short position in Chicago and as the 2023 growing season is imminent. There will be limited tolerance for yield loss in the 2023-2024 crop year. Rising Black Sea tensions linger in the background. A choppy market remains most probable into March and April.
Soybean futures were higher at the end of last week, with March soybeans marking the best close since last June. Soybean export inspections for this year have nearly caught up with last year’s pace. However, harvests in Brazil are advancing, and the pace of Brazilian exports will grow in the coming weeks.
The February Crop Report and the World Agricultural Supply and Demand Estimate report will be released next week. The U.S. Department of Agriculture is expected to maintain or increase its estimate of Brazilian soybean production and lower its estimate of U.S. exports. AgResource holds a long-term bearish outlook on strong rallies ahead of planting.
