Forecasts of very hot and dry weather in the western half of the Midwest are pushing grain and soybean futures higher today.
DTN senior market analyst Darin Newsom says, from a technical point of view, December corn could extend its rally to the 4.45 to 4.50 area. But he says the corn rally might be difficult to sustain.
“The market is strong, there’s no denying that. But we’re not seeing action in futures spreads or deferred basis right now to indicate that there is this overall fear of short supply coming down the road,” Newsom says. “So we’re not to that point yet.”
Newsom says soybeans are a different story.
“Unlike corn, we actually have some bullish spreads in the soybean market indicating that new crop supply and demand is nowhere near—or, at least, it’s not thought to be anywhere near as cumbersome as the numbers the USDA continues to release.”
Which means a more sustained soybean rally is possible, Newsom says.