Markets are pulling back overnight, giving back a small portion of the gains that we’ve seen since the USDA report on Friday as the rallies take a breather.
The CFTC report showed that for the week ending 1/7, managed funds were net buyers of 25k corn to push the net long out to 253k, net buyers of 14k beans to reduce the net short to 29k, and net sellers of 2k wheat to push the net short out to 89k. The buying in corn and beans was quite a bit greater than expected while the wheat position was in line with expectations.
Funds to start the week were estimated as net buyers of 20k corn with the net long now estimated at 294k, net buyers of 25k beans to put the net position at long 22k, and net buyers of 8k wheat to reduce the net short to 87k.
Conab raised their Brazilian bean production forecast to 166.32 mmt, citing good weather and an increase in their planted area. They estimated exports at 105 mmt (USDA 105.5). They lowered their corn production forecast to 119.55 mmt, citing smaller 1st season corn area and dryness in S. Brazil.
The U.S.$ continued its march higher to start the week with the index hitting the new recent highs again and reaching the highest levels since late 2022.
Russia fired their senior official responsible for agricultural exports. They aggressively sold wheat onto the world market in late 2024 despite last year’s short crop and expectations for a small harvest again this summer.
Corn posted a higher high, higher low, and higher close to start the week with prices able to trade into the 4.70-4.85 range, which is a place that the market consolidated last spring. The uptrend is in place with support at 4.60 and resistance 4.70-4.85.
Beans posted a higher high, higher low, and sharply higher close to start the week with the market seeing big follow-through buying after Friday’s gains. The market took out the high that was last traded on November 8 before pausing. Support is 10.30 and resistance is 10.50-10.55.
Corn saw good follow-through buying to start the week as the market continued to price in Friday’s bullish USDA report. The tighter U.S. and global supplies reduce some of the downside risk moving forward and will make the market more sensitive to any weather scares in the future. With that said, we currently have some premium bid into the market because of Argentine dryness and an expected slow start 2nd crop planting in Brazil, and while supplies are tighter than we thought, they’re still not as tight as prior years that produced larger bull markets. Next upside objectives for old crop corn are near 4.80 and 4.60 for new crop.
Beans ripped higher again to start the week as funds were aggressive buyers as the market adjusted for the smaller than expected U.S. crop on Friday’s report as well as rallying on more dryness in Argentina. The global supply outlook still appears to be on track to be very comfortable, driven by a record Brazilian crop. Producers should use puts to eliminate the downside risk on unsold bushels.
Corn down 1-2
Beans down 1-5