Markets are trading lower overnight with corn and beans giving back yesterday’s gains while the wheat market pulls back further within its recent range as U.S.$ strength weighs.
Managed funds to start the new year were estimated as net buyers of 2k corn to push the net long to 178k, net buyers of 2k beans to reduce the net short to 44k, and net sellers of 3k wheat to push the net short out to 89k.
Weekly export sales this morning for wheat came in at 140.6 tmt (200-500 expected), n/c wheat 0 (0-75), corn 777 tmt (800-1,400), n/c corn 0 (0-50), beans 484.7 tmt (500-1,200), n/c beans 0 (0-100), meal 203.8 (150-350), n/c meal 0 (0-50), oil 38.1 (5-30), and n/c oil 0 (0-10).
With the exception of meal, bad sales across the board.
Weekly EIA data showed corn usage for ethanol up 4k bbls per day to 1,111k bbls. Stocks were sharply higher, up 565k bbls to 23,639k bbls. Weekly production of 327m bbls was well above the 308m bbls we need to average to hit the USDA’s corn usage forecast.
Stone X raised their Brazil soybean production forecast to 171.4mmt (USDA 169).
Corn posted a higher high, higher low, and another new high close to start the year. The uptrend is in place, but the market is overbought with the overnight trade correcting from highs. Support is 4.40 and resistance 4.60.
Beans posted a higher high, higher low, and new recent high close to start the year. The market is overbought after recent gains, although directional indicators are getting a little more positive. Support for March is 9.80 and 10.00 with resistance 10.20 and 10.30.
Corn is trading near 6-month highs as we continue to have strong demand and there are weather concerns in Argentina. With that said, supplies are still expected to be adequate to meet US and global demand and the big global supply outlook for beans is bearish for all ag commodities. Producers should look at option structures to protect downside risk for unpriced bushels.
Beans have seen a large move from recent lows as Argentina has been dry and funds have covered a large portion of their short position. While Argentina has been dry, Brazil is still likely to produce a record crop. Producers should use options to cover their downside risk.
Corn down 3-4
Beans down 9-10