CHICAGO, Jan. 30 (Xinhua) -- CBOT agricultural futures held their gains this week, with corn and wheat going even higher on export demand.
With June and July being the next time for seasonal and annual highs and as the U.S. dollar is expected to weaken throughout most of 2021, Chicago-based research company AgResource expects corn futures will reach 6.00 dollars per bushel and soybean futures 15.50-16.00 dollars per bushel.
CBOT corn futures scored newer multi-year highs as China secured a record 243 million bushels of U.S. corn for old crop delivery in four days.
AgResource holds that the market must move higher to maximize spring seedings and encourage maximum exports from Argentina during the summer, and the U.S. Department of Agriculture's (USDA) U.S. export forecast is understated by 250-400 million bushels.
The need to ration supply becomes urgent if perfect weather fails to develop in Brazil in April-May. AgResource's concern over Brazilian production is elevated amid current dryness and latent safrinha seedings.
CBOT wheat found ample buying interest at long term chart support amid firm world cash prices and an increasingly bullish global feedgrain outlook. Russian farmers so far are not selling amid export tax uncertainty. This in turn suggests that global demand will be funneled to the U.S. market during the spring and early summer. Rising old crop export demand potential has amplified the erosion of U.S. end stocks in 2021-2022.
World cash wheat markets will not break until large EU/Black Sea production can be confirmed. This raises wheat's upside potential as there's little or no room for additional wheat feed use within key exporting countries.
AgResource holds that ideal spring weather is needed for wheat to turn bearish.
Early week selling in the soybean market uncovered strong demand and the market had recovered much of the previous losses at Friday's close. China continues to book U.S. old and new crop soybeans.
Soybean harvest in the key state of Mato Grosso remains well behind a year ago at 5 percent complete versus 27 percent last year. U.S. exports will be stout through February and the first half of March, as China is still bidding for U.S. old crop soybeans.
Based on the current pace of domestic crush and exports, USDA total demand forecasts are too low, AgResource noted. Meanwhile, there is no room in the balance sheet to raise estimates. AgResource is expecting a much stronger rally to ration U.S. supply, and holds first target for spot soybeans at 15.30 dollars per bushel. Enditem
