Markets are trading lower this morning with corn and wheat leading the weakness with a wetter forecast for HRW areas weighing.
Friday’s CFTC report showed for the week ending 4/22 that managed funds were net sellers of 12k corn to drop the net long to 113k, net buyers of 5k beans to push the net long to 31k, and net buyers of 7k wheat to reduce the net short to 90k. Corn and bean positions were in line with expectations while the short in wheat was smaller than expected.
Funds on Friday were estimated as net sellers of 1k corn to reduce the net long to 112k, net sellers of 2k beans to reduce the net long to 42k, and net buyers of 1k wheat to reduce the net short to 93k.
Market participants are still getting conflicting reports regarding the U.S./China trade war with the U.S. Treasury Secretary Bessent offering a different take than Trump who said trade talks with China were underway.
Ukraine reported 2m hectares of spring grains had been planted as of April 24, which was 17% less than at the same time a year ago.
Sovecon estimated Russian wheat exports in April would be 2.2 mmt, which is well-below the 4.6 mmt that was shipped in the same month a year ago.
The Brazilian unit of Cargill said they were ready to handle larger volumes of grain this year in Brazil, driven by the record Brazilian bean crop and a 2nd corn crop that has benefited from mostly favorable weather.
The U.S.$ is quiet to start the week with the index sitting near the middle of the trading range that we’ve seen the last couple weeks.
Corn posted a higher high, higher low, and higher close on Friday, but the market gapped open lower overnight and is testing last week’s lows this morning. Directional indicators are neutral with July support 4.70 and resistance 4.97.
Beans posted a bearish reversal on Friday with prices hitting new recent highs and then reversing to close lower. The market is pulling back within its recent range this morning, with last week’s breakout of the range to the upside a potential trap now. The market is overbought with room to trade lower if it corrects. Support for July is 10.40 and resistance 10.60.
Corn is starting the week under pressure as the market deals with uncertainty on tariffs, the 2nd crop in Brazil is seeing favorable weather, and the U.S. weather outlook is not concerning on a national level. The price outlook is unchanged with tightness in old crop supplies expected to provide support on pull-backs while expectations for a big U.S. planted area will weigh on new crop. Producers should continue to look at option strategies to establish new crop floors.
Beans may have posted a false breakout last week with prices unable to sustain gains into the close Friday with the market dropping back into the previous range this morning. The U.S./China trade war continues to provide an uncertain environment, but even without the trade war, global bean supplies are forecast at record levels. The outlook is unchanged that record supplies will weigh on old crop while expectations for smaller U.S. area mean new crop should maintain some risk premium during the U.S. growing season. Producers should make sure old crop sales are caught up and buy puts on unpriced bushels.
Corn down 6-7
Beans down 6-8