Markets are trading mixed this morning with beans continuing to see weakness on favorable weather while wheat is catching a bid as the market has struggled to see any follow-through selling the last couple days.
Managed funds on Wednesday were estimated as net buyers of 3k corn to reduce the net short to 211k, net sellers of 7k beans to push the net short to 16k, and net even in the wheat to leave the net short at 65k.
Export sales this morning for wheat came in at 567.8 tmt (200-600 expected), corn 1,262.1 tmt (375-900), n/c corn 888.6 tmt (150-700), beans 503 tmt (300-600),n/c beans 248.4 tmt (50-400), meal 207.7 tmt (75-400), n/c meal 370.8 tmt (50-550), and oil 4 (0-30).
Another surprisingly good week for corn exports, beans were able to meet expectations, and wheat was near the top end of the range of estimates.
Weekly EIA data showed ethanol production was up 9k bbls per day to 1,085k bbls. Weekly production of 319m gallons is in line with the necessary pace to hit the USDA’s usage forecast. Ethanol stocks were off by 158k bbls to 23,959k bbls.
Trump announced 50% tariffs on Brazilian imports starting on August 1st. The impact from that is likely to be mixed as that eliminates the chances of any Brazil corn, beans, or ethanol being imported into the U.S., but it also pressured the Real vs. the U.S.$, which will hurt the U.S.’s competitiveness to exports to other destinations.
December corn posted another lower low and lower high, but the market was able to reverse from lows to finish with small gains. The market is oversold with room to bounce as it corrects that condition. Support is 4.10 and resistance 4.30.
Beans posted a lower low, lower high, and lower close again with Nov. dropping through the lows that had been good support since late April. The market is oversold after recent losses with support 10.00 and resistance 10.10.
Corn posted a bullish reversal from lows yesterday and while it is seeing small losses in the overnight trade, it is holding above yesterday’s low. The market has priced in a lot of bearishness as funds have amassed an historically large net short. A 50% tariff on Brazilian imports rules out any imports of Brazilian corn into the U.S. as the current marketing year winds down, which means U.S. supplies will be tight. Producers can hold off from any bearish positions for now and can consider re-ownership strategies on previously sold grain.
Beans traded sharply lower yesterday and gapped lower overnight with managed funds working on building a net short in beans, which is something they had been hesitant to do the last few months despite the forecast for large global supplies. With the fund position still estimated at a relatively small net short, there is downside risk if they decide to keep selling. Producers should look at option strategies to protect the downside on unsold bushels.
Corn down 2
Beans down 1-5