Markets traded lower overnight, seeing follow-through selling after markets fell from intraday highs to close weak on Thursday. Managed funds on Thursday were estimated as net sellers of 5k corn to push the net short back out to 252k, net even in the beans to leave the net short at 202k, and sellers of 2k wheat to push the net short back out to 78k.
NOPA crush for July was supportive with crush coming in at 182.881 mbu (182.367 expected) and oil stocks at 1.499b lbs (1.608 expected).
The French wheat harvest was estimated at 98% harvested, with production expected to be the worst since the 1980’s. Their corn ratings dropped for the third consecutive week, falling 1% to 76% g/e as hot weather across southern Europe stressed corn. Germany’s wheat is expected to fall 8.2% on the year to the lowest level since 2018 with the country’s consumption expected to slightly exceed production. The International Grains Council lowered global wheat production by 2mmt to 799mmt (USDA 798.3). They raised global corn production to 1.226 bmt (USDA 1.2198), and global bean production was estimated at 419mmt (USDA 428.7).
The Buenos Aires grains exchange said cold and dry weather was starting to impact wheat in western growing areas with their wheat crop rated 33% g/e, 50% normal, and 17% regular-to-poor.
Ukraine grain exports through Romanian ports have slowed dramatically with Constanta shipping 43% less grain over the first seven months of the year relative to last year.
Renewable diesel production increased in the U.S. last year by 44% from the prior year, with 5 new plants opening.
Corn posted a bearish reversal within the recent range on Thursday, with prices testing old resistance-turned-support this morning that comes in today near 3.92. Directional indicators are neutral with resistance at 4.15-4.20.
Beans tried to bounce yesterday but pulled back from intraday highs to finish near unchanged with the market seeing follow-through to the downside this morning. The downtrend is still in place with support at 9.50 and resistance at 9.80.
Corn is back at the bottom of its recent consolidation range this morning, which the repeated tests of this price area do increase the potential of another leg lower. Old crop corn is still moving ahead of harvest to weigh on the market, but managed funds are still very short to provide support. The downside risk from here is not viewed as that large, but there isn’t a catalyst to spark any major buying either.
Beans are testing lows again this morning as yesterday’s rally after a better-than-expected new crop export sales report fizzled. The U.S. is on track for a big crop with the market likely to disincentivize acres in South America with lower prices. The trend is lower and fundamentals bearish.
Corn down 3-4
Beans down 6-8