Markets are trading mostly higher overnight in follow-through after corn and beans posted big reversals from lows on Thursday.
Managed funds on Thursday were estimated as net buyers of 2k corn to reduce the net short to 42k, net buyers of 5k beans to reduce the net short to 37k, and net buyers of 2k wheat to reduce the net short to 31k.
Export sales this morning for wheat came in at 504.1 tmt (250-550 expected), n/c wheat 0 (0-50), corn 2,225.7 tmt (1,200-2,200), n/c corn 0 (0-50), beans 1,702.7 tmt (1,000-2,200), n/c beans 0 (0-50), meal 251.4 tmt (150-350), and oil .4 (0-20).
Solid sales across the board with corn exceeding lofty expectations while wheat/beans were at the upper end of expectations.
Weekly EIA data showed ethanol production increased by 4k bbls to 1,042k bbls. Stocks were up by 121k bbls to 22,275k bbls. Production needs to average right around 1,040k bbls per day this marketing year to hit the USDA’s corn usage forecast.
The IGC left their global corn production estimate unchanged from the prior month at 1.224 bmt (USDA 1.217), and they left global wheat production at 798mmt (USDA 794).
Russia is proposing BRICS countries set up a grain exchange that would give Russia greater control over international prices for its ag exports. Prior efforts to implement similar agreements have had a 100% failure rate.
French corn harvest fell further behind its usual pace this week with harvest now 13% complete. Winter wheat planting is 10% complete vs. 27% on average.
Ukraine grain harvest has totaled 42.8 mmt from 84.8% of the sown area. Totla harvest is expected to be 54 mmt.
China pork production in Q3 dropped .8% from the same period a year ago, which was the third consecutive quarter to see annual declines as meat consumption continues to be disappointing.
Corn posted a bullish outside up day on Thursday with prices hitting new lows for the move then reversing to close above the previous day’s high. The market is starting to correct from oversold with room to bounce further as it corrects. Support is 4.00 and resistance 4.20-4.30.
Beans posted a lower low and lower high on Thursday, but the market did reverse from lows early lows to finish with sizable gains. The market is starting to correct from oversold with room to bounce more as that happens. Support for Nov. is 9.80 and resistance 10.00.
Corn made a nice recovery from lows yesterday to finish the day with solid gains, but looking at the bigger picture, not much changed. US and global supplies are forecast at tight enough levels where the downside risk below $4 isn’t much, but we’re still in the middle of a record harvest, which is expected to limit the upside. Longer term, balance sheets are tight enough where the market will be sensitive to weather scares, but they should be viewed as selling opportunities when the materialize.
Beans posted reversals from lows yesterday with a short-squeeze in the Nov/Jan bean spread leading the gains. Not much has changed in the bigger picture with US supplies excessive and an improving weather outlook in South America to limit concerns there. Beans are expected to be the weak leg moving forward with corn needing to start trading higher before the bean market is expected to sustain any moves higher. Producers can look at puts to cover unpriced production.
Corn up 1-2
Beans up 1-2