Markets are pulling back overnight with everything taking a bit of a breather this morning after finishing with gains on Thursday. News is slow as we head into next week’s Feb. crop report, but we remain in a period of elevated headline risk as the U.S. works with trade partners.
Managed funds on Thursday were estimated as net buyers of 3k corn to push the net long out to 368k, net buyers of 3k beans to push the ne tlong out to 95k, and net buyers of 8k wheat to reduce the net short to 88k.
World food prices dropped in the month of January, led by a drop in sugar and vegetable oil. The global index averaged 124.9 points vs. 127 points in December. The Jan. number is down 22% from the March 2022 peak.
Russia’s state property agency recently took control of its largest grain trader, which controls major grain-loading terminals in the Black Sea Region.
USDA will be out on Tuesday with their February supply and demand updates. Focus will be on South American production and any adjustments to U.S. corn demand. A full rundown of expectations will be out later this morning. Brazil bean production is expected to be 169.64 mmt, Argentine beans 50.49 mmt, Brazil corn 126.74 mmt, and Argentine corn 49.5 mmt.
Corn posted a lower low and lower high, but finished with gains on Thursday as prices are seeing some consolidation near recent highs. The market is still overbought. Support is 4.88 and resistance 4.95-5.00.
Beans posted a lower low and lower high on Thursday, but prices were able to recover from intraday lows to finish with a small gain. The market is consolidating within the range we’ve seen since mid-January. Support for March is 10.50 and resistance 10.80.
Corn posted its 2nd highest close of the year yesterday with prices able to make a large recovery from intraday lows as managed funds were willing to defend their massive speculative long in the market. The U.S. continues to see strong demand and South American crops still have a long way to go, but the market has priced in a lot of bullishness with the net fund position near record large. Producers should make sure sales are caught up and look at puts to cover unsold bushels.
Beans were able to recover from intraday lows on Thursday to finish the day with small gains after support near 10.50 held. The market is testing that support area again this morning with potential for selling to accelerate if that support level was to give way. Managed funds are sitting on a large net long and the global supply outlook remains bearish due to the large Brazil crop. Producers should make sure sales are caught up and buy puts to cover additional bushels.
Corn down 3-5
Beans down 7-9