Markets are trading with small losses this morning after another volatile night of trade. News that China would implement retaliatory tariffs on the U.S. led to another across the board sell-off, although prices have recovered from their overnight lows.  

Managed funds to start the week were estimated as net buyers of 10k corn to push the net long out to 355k, net buyers of 11k beans to push the net long to 77k, and net buyers of 4k wheat to reduce the net short to 99k.

The USDA monthly crushings report showed 473.2 mbu of corn used for ethanol in December, which was down from 484.2 mbu a year ago.

USDA soybean crush for December came in at 218 mbu (217.6 expected).

Ukraine said their ag exports in January were down 10% from the prior month due to lower oilseed shipments.

China said they planned to add to new stockpiling sites for grain in northeast China.

China said they would put tariffs on imports of U.S. coal, LNG, pickup trucks, and farm machinery.

Corn posted a giant outside up bar on Monday with prices starting sharply lower and then recovering to fill the gap on the charts that had been left last Thursday night.  The market is back into the upper end of its recent range with overbought/sold indicators neutral. Support is 4.88 and 4.78 with resistance 4.95-5.00.

Beans posted a giant outside up day as well with the market bouncing from trendline support to return to test trendline resistance. Support today comes in 10.50 and 10.37 with resistance 10.80.

Corn returned to the top of its recent range to start the week as we had another session driven by headlines with buyers stepping in after tariffs on the U.S.’s biggest corn buyer, Mexico, were delayed by a month. On one side, corn has strong demand and an uncertain South American crop as Argentina remains dry and Brazil’s second crop is off to a slow start. On the other side, we have an unprecedented amount of headline risk and a speculative long in the market that is near record large. With potential for large price movement, producers should make sure sales are caught up and use puts to protect unsold bushels.

Beans saw a major recovery from lows on Monday with prices testing long-term support near 10.30 to start the Sunday night session, but then they surged to finish with big gains after Mexican tariffs were delayed. They spiked lower again overnight on the Chinese tariff announcement, but have recovered most of those losses. Similar to corn, the beans are experiencing an unprecedent amount of headline risk, but a major difference is that Brazil is on the verge of harvesting what is expected to be a record crop that will push global supplies to record levels. With speculators still sitting on a large net long position, producers should make sure sales are caught up and buy puts to protect unsold bushels.

‍

Corn down 1-2

Beans down 4-6