CHICAGO, Jan. 7 (Xinhua) -- CBOT agricultural futures ended the first week of 2023 lower amid falling energy prices, faltering demand and deflation pressed by central banks worldwide raising interest rate, Chicago-based research company AgResource noted Saturday.
AgResource forecasts further rate hikes with the Fed funds rate to reach 5.50-5.75 percent before the pause button is hit later this year, holding volatility may persist into the second quarter with a downward bias.
CBOT corn futures shed premium this week as concerns over U.S. and global economic growth dominated price trend. Demand is an issue, and without rapid improvement in exports and ethanol grind, normal weather in U.S. Midwest in summer 2023 will allow U.S. balance sheet to be fully replenished. AgResource holds that resistance at 6.85 U.S. dollars for corn remains intact.
A choppy market and a broadly neutral trend are probable into mid to late winter. Argentine yield loss is guaranteed if cooler/wetter weather is not established by the end of January. AgResource advises old crop sales above 6.80 dollars and new crop sales above 6.15 dollars for corn.
As for wheat futures worldwide, AgResource expects support for wheat at 7.30 dollars. The long-term outlook is modestly bullish as favorable weather in Northern Hemisphere is needed to boost exporter stocks and stocks in crop year 2023-2024. 2022 cash sales of March wheat are recommended above 8.00 dollars.
Soybean futures finished the week lower. U.S. Department of Agriculture (USDA) will release several key reports next week, and USDA's assessment of South American soybean production will be key.
Brazil has begun harvesting wheat and it is likely a record-large crop. It has been the weather forecast for Argentina that has produced CBOT price volatility in the last two weeks. AgResource holds that any Argentine crop losses will be more than offset by a record-large Brazilian soybean crop. The long-term market outlook for soybean is bearish. ■
