Markets are trading lower across the board this morning with the news that Argentina would lower export taxes on soybeans by 6.5% and 2.5% on corn and wheat sparked aggressive selling on the open last night. The Argentine forecast is wetter for the next five days as well.

Export sales this morning for wheat came in at 164.8 tmt (200-600 expected), corn 1,661 tmt (700-1,700), beans 1,491.8 tmt (600-1,800), meal 208.7 tmt (100-450), and oil 2.9 (10-60).

Strong corn and bean sales while the wheat sales were disappointing.

Managed funds on Thursday were estimated as net buyers of 15k corn to push the net long out to 333k, net buyers of 12k beans to push the net long to 66k, and net even in the wheat to leave the net short at 91k.

Weekly EIA data showed ethanol production up 4k bbls per day to 1,099k bbls with ethanol stocks up by 866k bbls to 25,874k bbls. Weekly production was 323m gallons with production needing to average around 305m gallons to hit the USDA’s current usage forecast.

Argentina announced they would slash grain export taxes on grain exports, citing the improving health of the nation’s economy. The tax on soy exports will drop from 33% to 26% while the tax on soy products will drop from 31% to 24.5% and corn/wheat taxes will drop from 12% to 9.5%.

The Buenos Aires Grains Exchange lowered their corn and bean production forecasts by 1 mmt to 49 mmt and 49.6 mmt respectively.

Brooke Rollins, Trump’s pick to run the USDA, said she would consider direct payments to farmers to offset losses from proposed tariffs.

Corn posted a bullish outside up day on Thursday with the market finishing at new highs. The market is giving back those gains this morning on the tax news out of Argentina. The market is overbought and due for a correction within the uptrend. Support is 4.80 then 4.60 with resistance at 4.90.

Beans posted a bullish outside up day yesterday, but the market did finish well-below intraday highs. The market gapped open lower last night with the market testing support near 10.50 this morning. The market is overbought with room to correct within the recent range. Support is 10.50 and 10.30 with resistance at 10.80.
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Corn hit new highs yesterday as the uptrend was continuing and demand was strong. The market is pulling back this morning on the news that Argentina would lower their export tariff by 2.5%, which is expected to spark farmer selling there. Headline risk is expected to continue to be a major market mover. Considering the extent of the rally that we’ve seen the last few months, and the size of the managed fund long, producers should make sure sales are caught up and consider additional downside protection with options on unsold bushels.

Beans finished with big gains on Thursday, but those have been completely erased this morning as the Argentine tax news has potential to impact beans and bean products greater than the corn and wheat. With the global supply outlook already bearish and managed funds on an unprecedented streak of buying, beans could pull back considerably in the near-term. Make sure sales are caught up and use puts to protect unsold bushels.

Corn down 3-6

Beans down 10-15