CHICAGO, Jan. 23 (Xinhua) -- CBOT agricultural futures were in correction in the past week following weeks of rallies, Chicago-based research company AgResource noted.

Nevertheless, the Chicago company remains bullish on agricultural futures as the U.S. dollar declined on the growing prospect of a new U.S. COVID stimulus package with the U.S. Government debt pile to exceed 30 trillion dollars in the second quarter of 2021.

CBOT corn futures settled weaker for the first time in seven weeks. Fundamental input stays bullish as world cash feed markets rise and the U.S. corn remains the world's cheapest feed supply into summer. Yet, a technical correction was needed. AgResource holds that the recent break allowed a gap left open after the release of U.S. Department of Agriculture's (USDA) January World Agricultural Supply and Demand Estimates (WASDE) being filled while finding support at short-term uptrend line. With weak longs being liquidated, the outlook remains bullish as there's no sign that U.S. corn demand is being rationed.

U.S. corn end stocks are projected to fall to 1.1 billion bushels as the USDA's export forecast is 200-300 million bushels too low. The longer-term concern remains historically low soil moisture across key parts of Central Brazil, where safrinha corn seeding begins in the next 45 days. The need for North Hemisphere acreage expansion and record yield in 2021 is sharply elevated. Current prices provide an opportunity for end users to extend forward coverage. AgResource are anticipating new rally highs in late winter/spring.

U.S. wheat futures ended lower in sympathy with corn's collapse on Friday. Some in the trade were disappointed that Russia will not place an outright quota on wheat exports during the spring months. However, Russia will leave its plan of taxing exports 1.65-dollar per bushel beginning March 15.

Amid Russia's looming export tax, the goal of Europe's market is to prevent a swelling of export demand and instead shift interest to North America. AgResource holds that USDA's U.S. 2020-2021 wheat export forecast is 30-50 million bushels too low.

The longer-term issue for wheat remains the need for trend/above trend North Hemisphere yields this spring. Otherwise, exporter stocks/use will tighten further. This will in turn mandate new highs in global cash markets. AgResource holds that strong support rests at 6.20-6.25 dollars for March wheat, and further breaks must be used to advance wheat & flour supply coverage.

After closing higher for 6 consecutive weeks, CBOT soybean reported its largest decline in 6.5 years. Fundamentally, there is no good reason for such a sizeable correction, AgResource noted. China continued to book both old and new crop soybeans, with announcements nearing 16 million bushels. Meanwhile, the weekly export sales report showed that U.S. exporters booked another 67 million bushels last week, pushing U.S. export commitments to 95 percent of the WASDE annual forecast. The U.S. soybean usage pace is record large and the break will encourage fresh demand into summer.

There is no sign that the U.S. soybean supply is being rationed in exports nor in domestic crush. Based on the record large export commitment figure, AgResource holds that USDA should raise the export forecast by 150-225 million bushels.

Initial support for spot futures will be found just below 13 dollars, and AgResource stays strongly bullish on soybean's outlook.