Markets are trading mixed this morning with wheat outpacing the corn and beans after being the weakest market yesterday. Corn is recovering after a week-long stretch of large gains while beans have held together better.
Managed funds on Thursday were estimated as net sellers of 20k corn to reduce the net long to 292k, net sellers of 3k beans to reduce the net long to 2k, and net sellers of 8k wheat to push the net short back out to 88k.
Tariffs are in the headlines again with Trump saying the U.S. would impose a 10% hike to tariffs already in place on China. China accused the U.S. of fentanyl “blackmail”.
25% tariffs on Mexico and Canada are expected to go in place on March 4th with Trump unhappy with the progress on curbing fentanyl flows into the country.
Trump had also mentioned that tariffs on Mexico and Canada now may not go into place until April, leaving global markets confused.
The U.S.$ surged on Thursday on reports that tariffs would go into place next week.
Ukraine reported grain exports in the month of February were down 40% from the same period a year ago.
Corn posted a lower low, lower high, and sharply lower close on Thursday with prices dropping to the lowest levels since mid-Jan. The market is oversold after recent losses, but is on the verge of starting a downtrend if new lows are made. May support is 4.80 and resistance 5.00.
Beans posted a bearish outside down day on Thursday with prices taking out the previous day’s high and then closing below the previous day’s low. There is moving average support near 10.40, which has somewhat held, but a push below the 50 DMA at 10.39 would be bearish. May support is 10.40 and 10.30 with resistance 10.55.
Corn sold off hard on Thursday. The market was already seeing weakness and the outlook forum balance sheets didn’t give the market anything bullish. A late winter/early spring high is likely in place as South American crops are in ok shape and cash markets in the U.S. are well-supplied for now. With managed funds still very long, look for corn to run into selling pressure on rallies for the next couple months. Balance sheets are still tight enough where they will be sensitive to weather problems throughout the growing season. Make sure sales are caught up.
Beans held together much better than corn and wheat on Thursday but ultimately were pulled lower. The market has found good support near the 50-day moving average. The market is well-balanced with potential for a large move in either direction. With global supplies growing, producers should make sure sales are caught up and buy puts to protect additional bushels.
Corn mixed to higher
Beans up 3-5