Markets are trading lower across the board this morning with new trade concerns after Trump said he would place tariffs on the U.S.’ 3rd largest corn buyer Columbia. It was later reported that they would not place the tariffs, but the markets have remained under pressure as headline risk remains elevated.
Friday’s CFTC report showed that for the week ending 1/21, funds were net buyers of 19k corn to push the net long to 312k, net buyers of 5k beans to push the net long to 40k, and net buyers of 3k wheat to reduce the net short to 92k. Buying in corn and beans was smaller than expected.
Funds on Friday were estimated as net sellers of 6k corn to reduce the net long to 312k, net sellers of 7k beans to reduce the net long to 39k, and sellers of 5k wheat to push the net short out to 99k.
Ag Rural lowered their Brazilian bean production forecast by .5 mmt to 171 mmt (USDA 169) on lower yields in Mato Grosso do Sul. They estimated bean harvest at 3.9% complete, which was the slowest harvest pace since the 2020-21 growing season.
China said on Friday that their suspension of 5 Brazilian soy exporters would last 2 months. Brazil’s agricultural ministry secretary said the five units were only a fraction of the 1,700 Brazilian outfits authorized to export beans to China.
The USDA attaché in Argentina estimated the corn crop at 49 mmt (USDA 51).
Corn traded an inside day on Friday with prices finishing under pressure. We are trading below last week’s low this morning with the market showing signs that we could see a bigger correction. Support is 4.77 and then near 4.70. Resistance is 4.87-4.90.
Beans posted a lower low and lower high on Friday, but they were able to finish with small gains. The market is showing signs that it could see a bigger correction to the downside this morning. Support for March is 10.30 and resistance 10.50.
Corn finished off its recent highs on Friday with the market showing more signs that a correction was possible. The large managed fund long position is concerning in the current environment where headline risk is elevated. The Columbia tariff news yesterday was enough to spark some selling overnight and the forecast for Argentina is wetter too. Taking all of that into consideration, producers should make sure sales are caught up and look at adding puts to protect unsold bushels.
Beans were able to recover from intraday lows on Friday after initially seeing some weakness related to the changes to export taxes in Argentina, which is expected to spark producer selling there. Columbia is a large buyer of U.S. soymeal with the new tariff talks weighing as well. The global soybean supply outlook remains bearish on the back of the record crop in Brazil. Managed funds have been aggressive buyers over the last several weeks and headline risk is elevated. Producers should make sure sales are caught up and look at puts to protect unsold bushels.
Corn down 4-6
Beans down 9-10