Markets are seeing some follow-through selling after the weak start to the week in corn and beans. Wheat was trading lower, but has been able to bounce from lows.
Managed funds to start the week were estimated as net sellers of 10k corn to push the net short out to 40k, net sellers of 6k beans to push the net short out to 34k, and net sellers of 5k wheat to push the net short out to 34k.
Crop progress and export inspections will be out today due to the holiday yesterday.
France’s farm ministry cut their wheat production forecast to 25.43mmt, which is their smallest wheat crop since 1986. They raised corn production to 14.47mmt.
Ukraine said winter grain planting was 72% complete.
Turkey relaxed their wheat import rules just ahead of the expiration of their import ban that expires at midnight tonight. They had previously banned imports to protect their domestic producers’ prices.
Mexican and US rail companies said they had stopped issuing permits to send some grain through Eagle Pass, TX after a recent train derailment in Mexico closed the track and backed up shipments.
CONAB said they expect Brazil bean production to increase 12.7% y-o-y to 166.05 mmt (USDA 169). They estimated corn production at 119.74 mmt (USDA 127).
Crude oil prices collapsed late yesterday after the International Energy Agency said they would ensure there would be no energy supply disruptions. OPEC also seems to be having a hard time enforcing production limits.
Corn posted a lower low, lower high, and lower close to start the week with the market taking out trend support and finishing near lows. With yesterday’s breakdown, the market may look to test more support with next support near 4.00 and resistance 4.20-4.30.
Beans posted lower lows, lower highs, and a new recent low close to start the week. The market is oversold, but with the breach of support looks on track to test more support levels. Next good support is 9.80 with resistance now 10.00.
Corn is seeing modest follow-through after starting the week under pressure as weakness in the beans and crude oil is weighing. In the near-term, harvest pressure is expected to limit gains, but longer term, the US and global supply situation is tight enough where the market is likely to be sensitive to any weather scares with better marketing opportunities expected.
Beans are hitting new recent lows again this morning as crude and bearish weather in South America are weighing. Beans are expected to be the weak leg moving forward with corn needing to find a low and trade higher before beans will have much of a chance to find a low. Use puts to cover downside risk.
Corn down 2-3
Beans down 9-10