CHICAGO, Jan. 28 (Xinhua) -- CBOT agricultural futures closed mixed in the past week as buyers are positioning for the return of Chinese buyers following the Chinese New Year holiday.
Chicago-based research company AgResource said the U.S. Federal Reserve will raise interest rates on Feb. 1 by 0.25 percentage points to 4.50-4.75 percent, and forecasted further rate hikes with Fed funds rates to reach 5.25-5.75 percent before the pause button is hit late this year. It holds that the coming bull market is soyoil while the bear markets will be corn, soybeans, and soymeal.
CBOT corn futures ended firm this week while dismissing entirely the rapidly improving soil moisture in Argentina. A window for improved U.S. export demand will be open until May. Seasonally trends are broadly neutral into planting and AgResource expects this trend to be followed in 2023.
However, record large South American corn supplies will be highly important in the long run, the company said, adding that additional market share will be lost as importers shift to Brazilian corn and feed June onward.
U.S. wheat futures ended higher for a second week amid moderate fund short covering. It is difficult for wheat to be overly bearish given funds still holding a decently sized net short position in Chicago and as the 2023 growing season is imminent, AgResource said.
There will be limited tolerance for yield loss in the 2023-2024 crop year with rising Black Sea tensions lingering in the background, it said, adding that a choppy market remains most probable into March/April.
Soybean futures were under pressure at the start of the week following better-than-expected weekend rainfall in Argentina and broad fund liquidation. However, the CBOT break held the 50-day moving average and prices tried to recover into the end of the week.
U.S. soybean export sales are expected to grow minimally in the months ahead as Brazil harvests and exports record tonnages of soybeans, AgResource said. Brazilian soybean export offers are far below that of the United States, and Chinese buyers are expected to return from the New Year holiday with a strong demand for Brazilian soybeans.
U.S. crush margins are strong, but there is no reason to think that U.S. processing rates will reach full capacity in the coming months. Rallies above 15.25 dollars will struggle.
AgResource said it stays bearish on rallies, adding that the world will produce a record crop of soybeans in 2022-2023 with a Brazilian crop above 150 million metric tons.