Key reversals are technical chart formations indicating a possible change in market trend. A bearish key reversal hints of an impending short-tern downtrend in prices. While the corn charts look less negative, fundamentals and a recent slowing of export shipments and sales suggest that corn futures prices may have additional downward price risk possible in late February and early March. Other supporting factors include tight farmer holding and a seasonal pick-up in export sales, especially for soybean oil. Until the last two weeks, an expected decline in South America s soybean plantings for the spring 1999 harvest also helped to support soybean prices.
Sunflowers compete with soybeans in world markets, especially in the oil side of the demand.
These acreage trends are a caution that soybean prices may have moderate downside risk next summer with favorable U.S. growing conditions. A slow uptrend in prices for both crops into the spring planting season appears likely as the grain industry works out of storage space problems and responds to strong market signals to store as much grain as possible. The extent of spring price strength will depend on weather, CRP enrollment activity, and whether additional food assistance is given to Russia . The Russian aid package at this time includes only 20 million bushels of corn, 0.3 million metric tons of soybean meal, and 7 million bushels of soybeans. The soybean meal assistance is equivalent to the protein from 14 million bushels of soybeans.