Markets are under pressure this morning with wheat leading the move to the downside after technical support gave out.

Friday’s CFTC report showed that for the week ending 2/18, managed funds were net buyers of 21k corn to push the net long back out to 354k, net sellers of 12k beans to reduce the net long to 17k, and net buyers of 21k wheat to reduce the net short to 62k.

Funds on Friday were estimated as net sellers of 11k corn to drop the net long to 337k, net sellers of 5k beans to drop the net long to 15k, and net buyers of 2k wheat to reduce the net short to 69k.

AgRural lowered their forecast for Brazil soybean production to 168.2 mmt (USDA 169), citing dryness in Parana, Mato Grosso do Sul, and Rio Grande do Sul for the lower revision.

The U.S.$ dropped to recent lows to start the week, but it has recovered and is now seeing small gains on the day.

China’s Central Rural Work Leading Group said rising Chinese food demand called for increased efforts to boost grain production. They said there should be a focus on self-sufficiency and supply stability to counter potential disruptions to agricultural trade with the U.S.

Corn posted a lower low, lower high, and lower close on Friday with the market seeing follow-through selling and taking out trendline support overnight. There is more room to trade lower before the market will be oversold with support for May at 4.92 and resistance 5.04.

Beans posted a higher high and higher low on Friday but reversed early gains to finish lower with the market seeing follow-through selling overnight. Support for May is 10.47 and resistance 10.63.

Corn is starting the week under modest pressure, seeing follow-through to the downside after closing lower on Friday. Managed funds are still sitting on a large net long, the weather in South America is good for crop production, and there is typically some selling pressure ahead of first notice day, which is this Friday. Make sure sales are caught up and I buy puts to protect unsold bushels.

Beans tried to rally on Friday but ran into moving average resistance and reversed to close lower. The market is well-balanced right now with potential for a large move in either direction. With that said, we have a record crop being harvested in Brazil and the wetter forecast for Argentina will help crops there. With global supplies forecast to be record large, there is downside risk. Make sure sales are caught up and buy puts to protect unsold bushels.

Corn down 3-5

Beans down 2-3