CHICAGO, Oct. 22 (Xinhua) -- CBOT agricultural futures sagged in the past week as the Federal Reserve is expected to raise the federal funds lending rate by another 0.75 percent in November, which may act as a drag on future U.S. economic activity, Chicago-based research company AgResource said in a report.
Confidence in whether the U.S. central bank can orchestrate a "soft landing" is in decline, AgResource said, adding that rallies in U.S. grain markets are unlikely to be sustained on slowing demand.
Corn futures appear to be caught in a range of 6.70-7.05 dollars, and this range may stay intact into late fourth quarter, it said.
World wheat futures ended mixed to lower as CBOT/Kansas chart patterns turn bearish and world trade continues to lag behind last year considerably. AgResource calculates that shipments from the major exporters through mid-October are down 5.4 million metric tons or 10 percent year on year as importers struggle or remain unwilling to extend forward coverage.
The pace of Black Sea exports remains priority number one, and the entirety of the world market needs clarity on the corridor deal. There is no fear of shortages in the market at present, the company said.
Supply problems abound amid historic drought in Argentina and threatening excessive rainfall in Australia. Russian wheat seeding will be down from last year amid adverse weather, and Ukrainian seeding will be down 20-30 percent amid logistical and input challenges. U.S. Plains drought is being closely monitored.
Soybean futures held a relatively narrow range for the week and marked modest gains. Support came from the quickly advancing harvest as well as strong domestic processing margins and additional U.S. export sales announcements. Weather conditions across the Plains and Midwestern states remained ideal for harvest in most regions.
AgResource expects that 77-82 percent of the U.S. soybean crop will have been harvested by Sunday.
Mississippi River costs are soaring, which is pushing FOB (Free on Board) basis in the Gulf at 2.60 dollars higher. This is slowing new U.S. export demand and will prod any buyers to the Pacific Northwest. ■
