Markets are catching a bid overnight with beans seeing the best gains as all markets try to pare back a portion of yesterday’s sizable losses.

Managed funds on Wednesday were estimated as net sellers of 20k corn to reduce the net long to 229k, net sellers of 10k beans to push the net short out to 36k, and net sellers of 1k wheat to push the net short out to 76k.

Weekly EIA data showed ethanol production was off by 31k bbls to 1,062k bbls per day. Weekly production was 312m gallon vs. a pace of ~305 to hit the USDA’s usage forecast. Stocks were up by 87k bbls to 27,376k bbls.

China is expected to import a record amount of soybeans in the 2nd quarter this year after customs issues delayed the arrival of some Brazil bean shipments over the last month. Imports from April through June are forecast to hit 31.3 mmt, which would be up 4.6% from the same period last year.

The EU announced retaliatory tariffs against the U.S. yesterday on goods that included soybeans, almonds, and pork.

PepsiCo, Conagra, and Smucker said they were asking the Trump Admin. for exemptions on imports on goods such as cocoa and fruit, which are goods not available from U.S. sources.

CONAB estimated the Brazil bean crop at 167.37 mmt (USDA 169).

The Rosario Exchange lowered their Argentine bean production forecast by 1 mmt to 46.5 mmt (USDA 49).

Scattered showers are hitting parts of Brazil this morning but nothing widespread.

The next week is very dry for much of Argentina and Brazil with 2nd crop corn in Brazil at the greatest risk.

The 6-10 reverts to wetter in Argentina and more normal rains across Brazil, which should help to maintain 2nd crop corn prospects in Brazil.

Corn posted a lower low, lower high, and lower close on Wednesday with prices dropping within their recent trading range. The market is correcting from overbought with more downside risk as that happens. Support for May is 4.40 and resistance 4.72.

Beans posted a lower low, lower high, and lower close on Wednesday with the market probing below psychological support at 10.00 before bouncing.  Directional indicators are balanced after the recent trade action with potential for a sizable move in either direction. Support is 10.00 and 9.80 with resistance at 10.20-10.30.

Corn retraced a large portion of the gains that we had seen since early last week yesterday as ongoing trade war fears led to more fund liquidation as well as an unwind of inflationary bets that were liquidated after yesterday’s inflation report came in lower than expected. The market is catching a small bid this morning as the market may be ready to settle into more of a range-bound trade ahead of the planting intentions and quarterly stocks report at the end of the month. With that said, we still have a very large fund long in the market that could be liquidated if we see bearish headlines. Producers should make sure sales are caught up.

Beans traded sharply lower on Wednesday as well with the market probing recent lows under $10.00 before bouncing into the close and trading higher overnight.  The global bean supply outlook is still bearish with South American hedge pressure expected to weigh on old crop prices for the next 1-2 months. Producers should make sure sales are caught up and buy puts to protect additional unsold bushels.

Corn up 1-3

Beans up 7-10