Markets are lower as we head into the last trading day of the week with beans leading the losses after an eventful day on Thursday that saw beans reverse from intraday highs to close lower, which coincided with a major reversal in the Nov./Jan. bean spread as well.
November options expire today with soybean option open interest the greatest at the $10 strike.
Managed funds on Thursday were estimated as net buyers of 4k corn to reduce the net short to 60k, net buyers of 1k beans to reduce the net short to 34k, and net buyers of 1k wheat to reduce the net short to 24k.
China said their grain output for the 2024 crop was set to exceed 700 mmt, which they said was the 9th consecutive year of stable grain output. They said efforts to ensure stable and safe supply of grains cannot be relaxed with the ministry selecting high-oil and high-yield GMO soybeans to support soybean production as well as planning subsidies for soybean processors. They also said they would increase the scale of govt. corn purchases.
Thursday’s corn exports were exceptional, posting their 5th largest weekly total ever, only behind weeks in 2021 when China made volume buys.
Turkish grain production this year is estimated at 39.2 mmt, which is down 7.1% from the prior year.
French corn harvest was estimated at 25% complete, which is behind the average pace of 69% as they continue to fight a wet harvest. Wet weather is also slowing their planting of winter crops with soft wheat planting 21% complete vs. 47% on average.
Russia said they would look at Turkish proposals to revive the Black Sea shipping deal.
Corn posted a higher high, higher low, and higher close on Thursday with the market running into resistance near 4.20 before the rally slowed. The market is overbought after recent gains with directional indicators neutral. Support is 4.00 and resistance 4.20-4.30.
Beans posted higher highs and higher lows on Thursday, but the market reversed from intraday highs to close lower. The market is starting to correct from overbought. Support is 9.80 and resistance 10.00.
Corn is on track to finish the week with nice gains as harvest winds down in a lot of areas and the US continues to see very strong export demand. The near-term outlook is still for a sideways trade with potential for a correction after recent gains, but longer-term, balance sheets are tight enough where the market is expected to be sensitive to any weather scares during the South American or US growing seasons. Producers can look at positions to re-establish upside on previous sales if we get a pull-back over the next few trading days.
Beans are also on track to finish the week with nice gains, although beans did lead the correction from highs yesterday with the reversal in the Nov/Jan spread a bit concerning as spread weakness often precedes flat-price weakness. Producers should make sure sales are caught up with the bean fundamental outlook still weak.
Corn down 2-3
Beans down 3-6