Markets are seeing widespread weakness this morning, with currency moves in Asian markets and a weak U.S. jobs report on Friday sparking a global risk off trade.
Friday’s cftc report showed that for the week ending 7/30, managed funds were net buyers of 23k corn to reduce the net short to 295k, net sellers of 15k beans to push the net short out to 179k. The funds were less short than expected across the board.
French wheat harvest was reported as 67% complete, which is well-behind average. A wet fall for planting and a wet summer for harvest is expected to produce the smallest wheat crop in over a decade.
Hot weather continues to hurt crops in Ukraine, with the Ukraine Agrarian Council saying their 2024 corn crop could drop from last year’s crop of 29.6 mmt to 23.4 mmt this year.
Technical trends have corn and beans in a downtrend. Corn is dropping back toward recent lows with Dec. back below 4.00. The trend is lower, with support 3.90 and resistance 4.05.
Beans are in a downtrend, with support 10.00 and resistance 10.30.
Corn is starting the week lower, with outside markets pressuring grains. With “the funds” aggressively short and ideas that global crops are starting to shrink, follow-through selling from this point is not expected as bearishness is already priced in and fund liquidation would actually be supportive at some point.
Beans are set to start the week lower, with outside market selling spilling into the beans. Similar to corn, a lot of bearishness is priced in and if large speculators start dumping positions, they would actually be buyers of beans.
Corn down 6-7
Beans down 10-12