Markets are trading higher overnight, seeing modest follow-through buying after the shocking report from the USDA on Friday showed much smaller corn and bean production than the market was anticipating.
Friday’s CFTC report was delayed until this afternoon.
Funds on Friday were estimated as net buyers of 22k corn with the net long now estimated at 251k, net buyers of 25k beans with the net short down to 22k, and net sellers of 2k wheat with the net short estimated at 98k.
Recap of Friday’s bullish numbers from the USDA:
The lower national corn and bean yields were the biggest surprises, which sparked the large gains.
A story broke late in the trading session on Friday that said ethanol producers would have a much more difficult time qualifying for subsidies for the production of sustainable aviation fuel.
China soybean imports were record large in 2024 with imports coming in at 105.03 mmt, which was up 6.5% from a year ago. “Trade war concerns” were cited for part of the strength in imports.
Russian wheat export prices remained flat to start the week. Sovecon reported that weather remained abnormally warm across major winter wheat areas in Russia with concerns that the lack of snow cover could cause winter kill if temperatures return to normal.
Corn posted a higher high, higher low, and sharply higher close on Friday with the market seeing follow-through to the upside this morning. The market is getting to be a bit overbought after recent gains with prices entering the price range that we last saw from Feb. through May of 2024. Support is now 4.60 and resistance 4.85-4.95.
Beans posted a higher high, higher low, and sharply higher close on Friday with the market pushing through resistance at the top of the range that we had been trading in since mid-November. There is room to trade higher before the market is overbought, but it is bumping into long-term resistance near 10.30 this morning. Support is 10.00 and resistance 10.30-10.40.
Corn surged on Friday after the USDA report showed national corn yield well-below expectations. Prices are now back to the price levels that we were trading last spring. The market was expected to be sensitive to any weather issues in South America or in the U.S. this summer. Friday’s tighter supplies will make the market even more sensitive to any weather problems. With the new bullish supply numbers, we expect to get better pricing opportunities for both old and new crop corn with next upside objectives for old crop in the 4.80-4.90 area and near 4.60 for new crop. While the outlook is much better, we still have the bearish global bean outlook that is expected to be a general weight on all markets.
Beans traded sharply higher on Friday after the USDA said the U.S. crop was much smaller than expected and the dryness across Argentina is persisting to stress crops there. While the U.S. bean numbers are more supportive, we still have bearish global numbers driven by a record crop in Brazil, and China imports are expected to dwindle in the coming months. Producers should make sure sales are caught up and look at puts to protect unpriced bushels.
Corn up 2-4
Beans up 2-5