Markets are trading mixed this morning in a quiet trade as markets wait for news regarding tariffs after China announced new tariffs over the weekend. The latest reports didn’t mention any tariffs on agricultural products. Trump announced tariffs on steel and aluminum would go into place today, which would have the greatest impact on Canada.
Friday’s CFTC report showed that for the week ending 2/4, managed funds were net buyers of 13k corn to push the net long out to 364k, net buyers of 533 beans to push the net long to 57k, and net buyers of 20k wheat to reduce the net short to 90k. The bean long was quite a bit smaller than expected while corn/wheat were inline with expectations.
Managed funds on Friday were estimated as net sellers of 11k corn to reduce the net long to 354k, net sellers of 9k beans to reduce the ne tlong to 41k, and net sellers of 2k wheat to push the net short out to 86k.
Russia’s IKAR lowered their 2024/25 wheat export forecast to43.5 mmt (USDA 46). They lowered their 2025 production forecast to 82-84 mmt, which would be the 2nd consecutive year of short Russian wheat crops.
APK-Inform estimated Ukraine’s 2024/25 grain exports at 37.95, which was up from 37.62 mmt previously. They raised wheat exports from 14.4 to 14.5 mmt (USDA 16).
Brazil soybean forward sales from producers are estimated at 39.4%, which is below the 5-year average of 42.3% for this time.
Ag Rural estimated Brazil bean harvest at 15% complete, which is down from 23% a year ago. They estimated 20% of second crop corn had been planted, which was down from 38% a year ago.
The Rosario Grains Exchange said last week’s rains helped save crops “from the inferno”, but they also said not everyone received relief with 30-50% of soybeans in regular or poor condition.
Corn posted a lower low and lower close on Friday with the market seeing follow-through selling last night initially. The market found support in the low-4.80’s and then recovered to test resistance near 4.88 this morning. The market is showing signs that a bigger correction is possible.
Beans posted a lower low, lower high, and lower close on Friday with the market seeing some follow-through selling in early trade last night before prices recovered. Directional indicators are neutral with support at 10.30 and resistance 10.50.
Corn is starting the week near the middle of the range that we’ve seen over the last couple weeks with prices seeing consolidation trade. Managed funds are still sitting on a large net long. The buying on the cftc report last week was primarily covering of shorts, which maybe a sign of capitulation by shorts in the market. Regardless, we still have a lot of speculative length in the market with elevated headline risk. Producers should make sure sales are caught up and consider puts to protect unsold bushels.
Beans are starting the week in the lower part of their recent range as we are seeing some consolidation ahead of tomorrow’s USDA report. There is still a lot of speculative length in the market and the global supply outlook is expected to remain bearish on account of the record Brazilian crop. Producers should make sure sales are caught up and look at puts to protect unsold bushels.
Corn up 1
Beans down 1