Markets are trading lower overnight with wheat seeing the biggest losses as the correction from highs earlier in the week continues. All markets remain within their recent ranges with all three struggling to get much momentum going in either direction.
Managed funds on Wednesday were estimated as even in the corn to leave the net short at 119k, net buyers of 5k beans to reduce the net short to 121k, and net even in the wheat to leave the net short at 29k.
Export sales this morning for wheat came in at 246.3 tmt (300-650 expected), corn 847.4 tmt (550-1,400), beans 1,748.1 tmt (500-1,600), meal -2.9 (-50-200), n/c meal 283 tmt (100-450), oil 46.7 (0-10), and n/c oil .3 (0-10).
Weekly EIA data showed ethanol production off 31k bbls per day to 1,049k bbls. Stocks were up by 71k bbls to 23,785k bbls.
The Fed was more aggressive with their rate cut on Wednesday than expected, opting to lower the overnight lending rate by 50 basis points (25 expected). Equity markets have had mixed reactions to such adjustments in the past, but are trading sharply higher this morning with the S&P 500 futures testing all-time highs that were traded in mid-July.
Argentina river levels are starting to be more of a concern with ships at inland ports forced to reduce cargo size. The Parana River, which carries 80% of their grain for export is at the 2nd lowest level for this time since 1970.
Russian announced a 4th grain growing area state of emergency due to heavy rains killing winter crops during sprouting time. The 4 regions accounted for 5% of last year’s grain harvest.
Ukraine’s corn exports this year are expected to fall sharply due to their projected smaller corn crop. Their leading ag union estimated corn harvest of 21-22 mmt (USDA 27.2) and they estimated exports of 15-17 mmt (USDA 24). Ukraine’s ag ministry expects corn production to be 25 mmt.
China corn imports through the first 8 months of the year were down 16% from the same period a year ago with US corn exports to China down even more than that.
Corn posted a higher high, higher low, and slightly higher close on Wednesday with prices finishing at the upper end of the range. The market is pulling back overnight as the market has gotten to be a bit overbought. Directional indicators are still neutral. Support for Dec. is 4.00 and resistance 4.20-4.30. Beans posted higher highs, higher lows, and higher close on Wednesday with the market finishing right at the 50 DMA, which has been a tough level for the bean market to sustain a trade above. The market is back below this morning. Directional indicators are neutral with the market very well balanced. Support is at 10.00 and resistance 10.20-10.30.
Corn is seeing small losses overnight but is holding near the top of its recent trading range with shrinking US national yield ideas and strong demand prospects supporting. Harvest pressure is expected to limit gains in the coming weeks, but the USDA’s current ending stocks forecast is not overly bearish at current price levels, especially considering it is expected to get tighter. Look for the range-trade to continue for now.
Beans saw a big move higher yesterday with China returning from Holiday and apparently wanting some beans. Beans still have the most bearish fundamental outlook on expectations for big crops in South America, but the finish to the US crop has been less than ideal and the US continues to find decent export demand as we head toward the time of the year when we ship out the most beans. Look for a sideways trade, but beans are expected to underperform the corn and wheat over the long haul.
Corn down 1-2
Beans down 1-2