Markets are trading mixed in a quiet trade as we head into the USDA’s quarterly stocks and planted acres report that will be out at 11 this morning.
Friday’s CFTC report showed that for the week ending 6/24, managed funds were net buyers of 3k corn to reduce the net short to 182k, net sellers of 36k beans to reduce the net long to 23k, and net buyers of 17k wheat to reduce the net short to 65k. The buying in corn and wheat was greater than expected while the selling in beans was greater than expected as well.
Funds on Friday were estimated as net buyers of 13k corn to reduce the net short to 181k, net buyers of 7k beans to push the net long to 14k, and net buyers of 2k wheat to reduce the net short to 71k.
Pre-report estimates have corn acres today at 95.35m, bean acres 83.655m, and wheat acres 45.438m. Corn stocks are expected to be 4.641 bbu, bean stocks 980 mbu, and wheat stocks 836 mbu.
U.S. and Indian trade talks have reportedly been focused on agriculture with the U.S. pushing for greater access to agricultural goods and ethanol markets.
Brazil 2nd crop corn harvest is estimated at 19.46% complete vs. 47.14% at the same time a year ago.
The Rosario Exchange reported that Argentine soy sales in June were 22% above the five-year average as exporters sold ahead of a planned tax hike.
December corn posted a higher high, higher low, and a higher close on Friday as the market bounced from oversold. The trend is still lower, but a larger bounce is possible as the market corrects. Support is 4.18 and resistance 4.45-4.50.
Beans posted a higher high, higher low, and higher close on Friday, although the market pulled back from intraday highs to finish near the middle of the day’s range. The inability to mount much of a recovery on Friday keeps the market leaning bearish. August support is 10.25-10.30 and resistance 10.50.
Corn was able to stabilize on Friday, but sellers are stepping in again this morning as weather is viewed as benign, 2nd crop harvest in Brazil is ongoing, and funds are not afraid of a bullish surprise on today’s report. Sales are not advised after the recent weakness, but option strategies that provide floors with upside can be used to get through the report.
Beans were also able to stabilize to finish last week as new crop prices found support near the middle of the range that November beans have traded going back to last July. The global supply outlook continues to be concerning on projected record supplies for both old and new crop. Producers can look at option strategies to cover the downside risk.
Corn down 4-5
Beans up 1-3