Markets are trading mostly higher this morning, with wheat and old crop beans seeing the best gains.
Managed funds on Thursday were estimated as net sellers of 7k corn to push the net short out to 357k, net buyers of 2k beans to reduce the net short to 196k, and net sellers of 2k wheat to push the net short out to 87k.
The International Grains Council raised their forecast for global corn production to 1.225 bmt (USDA 1.225 bmt). They also raised their global wheat production forecast by 8mmt to 801mmt (USDA 796.2). Despite the upward revisions, they still expect global usage to exceed production with stocks forecast to drop to their lowest level in 10 years.
China is reporting large supplies of beans at ports, with record imports from Brazil expected for the month of July, which may slow US demand when harvest ramps up. The build up is believed to be in preparation of a potential trade war.
French wheat ratings were down 5% from the prior week to 52% g/e as they continue to harvest their disappointing crop that was impacted by wet weather last fall and again this spring. Harvest is 51% complete vs. 43% on average.
Ukraine reported 13.8mmt of grain had been harvested so far this season.
Dec. corn posted a lower low, lower high, and lower close on Thursday with prices pulling back to the lower end of the range that we’ve seen this week. The market is balanced after consolidating with support 4.05 and resistance 4.15.
Beans posted a lower low and lower high, but finished with small gains on Thursday with the market continuing its correction from oversold. Support for August is 10.80 and resistance 11.30.
Corn dropped back to the bottom of its recent consolidation area yesterday as a lack of threatening weather and managed funds trading with the wind at their back pushed prices lower again. The fund short is record large and a lot of bearishness has been priced in. Be patient with sales as the downside risk from here in the near-term is not believed to be that great.
Beans are catching a bid this morning with August able to close the gap at 11.05 that was left on Sunday night when the market flushed to the downside. Old crop beans are tight and we saw a sizable flash sale to China yesterday, who is very short-bought for this fall. The long-term supply outlook is very bearish, but the funds are record short and a lot of bearishness has been priced in. Be patient with sales at this level.
Corn up 2-3
Beans up 4-8