Markets started the month of February under pressure with uncertainty regarding trade weighing after Trump announced tariffs on Canada, Mexico, and China over the weekend. The markets mounted sizable recoveries from overnight lows following comments from the White House that calmed some of the trade fears.  

Friday’s CFTC report showed that for the week ending 1/28, managed funds were net buyers of 39k corn to push the net long out to 351k, net buyers of 16k beans to push the net long to 56k, and net sellers of 19k wheat to push the net short out to 111k. The buying in corn and beans was much greater than expected as well as the selling in wheat.

Funds on Friday were estimated as net sellers of 15k corn to reduce the net long to 345k, net even in the beans to leave the net long at 66k, and net sellers of 4k wheat to push the net short out to 103k.

Canada and Mexico both said they would take retaliatory measures against the U.S.

The U.S.$ returned to recent highs in response to the tariff threats.

The Buenos Aires Grain Exchange lowered their Argentine corn production estimate to 49 mmt (USDA 51) and bean production at 49.6 mmt (USDA52).

Corn traded sharply lower on Friday and then gapped open lower last night with the price action driven by headlines. The market has more room to trade lower before it will be oversold. Support is near 4.70 and resistance 4.77.

Beans posted a lower low, lower high, and lower close on Friday and gapped open below support last night. The market has room to trade lower before it is oversold. Support for March is 10.30 and resistance 10.50.

Corn is under modest pressure this morning with the threat of tariffs on the largest importers of U.S. corn and ethanol concerning for demand. Managed funds are sitting on a near record net long position at a time of unprecedented headline risk. Producers should make sure sales are caught up and use puts to protect unsold bushels.

Beans spent much of last night trading lower but held above long term support at 10.30 and have recovered to trade higher this morning. The global outlook for beans is bearish regardless of tariffs with a record crop coming from Brazil. Producers should make sure sales are caught up and buy puts to cover unsold bushels.

Corn down 3-5

Beans mixed to lower