Markets are trading mixed overnight with corn and beans seeing modest follow-through buying after finishing with gains on Friday, while the wheat is following global markets lower. Outside markets have crude trading sharply lower, while the record run in equity markets continues with the S&P 500 hitting another new all-time high.
Friday’s CFTC report showed that managed funds for the week ending 11/5 were net buyers of 40k corn to flip the net position to long 22k, net buyers of 2k beans to reduce the net short to 70k, and net even in the wheat to leave the net short at 31k. The buying in corn was much greater than expected, while the buying in beans was quite a bit less than expected. Wheat's position was as expected.
Funds on Friday were estimated as net buyers of 10k corn with the net long now estimated at 48k, net buyers of 12k beans to reduce the net short to 38k, and net even in the wheat to leave the net short at 31k.
Friday’s report surprised the market with a US bean yield well-below the pre-report estimates, which helped to tighten the US ending stocks. Corn numbers were supportive while wheat was neutral. Corn and bean supplies in the US and globally are still projected at comfortable levels while the global wheat outlook is tighter.
Rundown of Friday’s numbers:
Ag Rural reported Brazil soybean planting at 67% complete, which is up from 54% a week ago and 61% last year at this time.
APK Inform left their Ukraine grain production estimate at 52.5 mmt and exports at 37.3 mmt.
Corn posted a higher high, higher low, and higher close on Friday with the market hitting the top of the recent range before pulling back. The market is overbought after recent gains with potential for pull-back before a more bullish move can begin again. Support is 4.24 and resistance 4.30-4.40.
Beans posted a higher high, higher low, and higher close on Friday with the market running into resistance at the 100 DMA before pulling back. The market hit that same resistance level near the highs overnight before pulling back as well. The market is overbought. Jan. support is 10.00 and 9.80 with resistance at 10.30-10.40.
Corn finished last week near recent highs following the USDA report that showed slightly tighter, but still comfortable US balance sheets. The outlook for a mostly range-bound trade is still in place. With the market currently at the top of the range, producers should make sure sales are caught up.
Beans surged on Friday after the USDA surprised with a lower-than-expected US yield. The USDA offset much of the drop in production with smaller demand, which left US ending stocks at comfortable levels despite the drop in yields. The global numbers were little changed with a large build in global bean supplies still expected. Managed funds have covered a large portion of their net short, and we still need to see major crop stress in South America to change the outlook for burdensome global bean supplies. Producers should make sure sales are caught up after the recent gains.
Corn down 1-3
Beans up 3-6