Markets are trading mixed this morning, with beans adding to losses initially overnight but have been able to bounce this morning. Corn and wheat are trading with small losses as they see consolidative trade within their recent ranges.
Managed funds on Tuesday were estimated as net sellers of 5k corn to push the net short to 251k, net sellers of 12k beans to push the net short out to 205k, and net sellers of 3k wheat to push the net short out to 78k. France Agrimer said the short French wheat crop is also showing some quality concerns due to excessively wet weather.
Ukraine reported grain exports so far this marketing year at 5.3mmt, which is up from 3.12mmt a year earlier. Ukraine’s Agrarian Council said their corn production could drop to 20-21mmt if their current drought persists. The USDA estimated their corn production at 27.2 mmt on Monday’s report.
Egypt ended up purchasing only 280 tmt of wheat in their recent tender, but there are reports that they were in talks to buy up to 1.8mmt more. They couldn’t agree on payment terms for such a large transaction.
China soymeal futures hit new lows the last year overnight on lower U.S. bean prices and high local soymeal supplies. Chinese crush margins remain in the red. California said they would restrict the amount of plant-based oils that can be used in renewable diesel in favor of more reused cooking oil, which would have demand implications for U.S. bean oil.
Corn pulled back to previous trendline resistance-turned-support yesterday and is testing that support again this morning. The market is correcting from oversold with directional indicators neutral. Support for Dec. is 3.97 and resistance is now 4.15-4.20.
Beans posted another lower low, lower high, and lower close on Tuesday. The market dropped to new lows overnight and has been able to bounce this morning, setting up a potential reversal. The market is extremely oversold.
Corn is trading with small losses this morning as the market trades sideways within its recent range. A lot of bearishness has been priced in, managed funds have been buyers on pullbacks, and while the balance sheets are comfortable, they’re not overly bearish from current price levels. The downside risk from here is not viewed as that great. If the market can muster a move to the upside, selling interest from producers would likely emerge to cap a rally in the 4.20-4.30 area basis Dec. futures.
Beans dropped to new lows overnight before bouncing with the market seeing gains this morning. The outlook for beans remains weak with big supplies expected in the U.S and globally. The trend is lower until it is not.
Corn mixed
Beans up 6-8