Markets are catching a bid this morning with sellers pausing on reports that tariffs on Mexico and Canada could be eased as early as today.

Managed funds on Tuesday were aggressive sellers again estimated as sellers of 15k corn to reduce the net long to 251k, net sellers of 8k beans to push the net short out to 31k, and net sellers of 7k wheat to push the net short out to 97k.

Howard Lutnik said yesterday afternoon that tariffs on Mexico and Canada could be resolved as early as today. This helped grains move from their lows on Tuesday and put a strong bid under equity markets late in the session and again overnight.

China said in retaliation for the latest tariffs that they would source more meat, dairy, and grains from countries in South America, Europe, and the Pacific.

China also said they were increasing it annual grain production target and said they would expand its agriculture stockpile budget.

Russia’s chief meteorologist said winter crops came out of dormancy better than they went in, but that they still needed more precipitation.

Bayer stock traded higher today on a better company outlook for 2026 with a return to growth expected after seeing a decline this year.

The U.S.$ is trading sharply lower again this morning and is at the lowest level since the week of the election last November.

Corn posted lower lows, lower highs, and a lower close on Tuesday, but the market was able to post a large recovery after hitting support levels, showing signs that the selling may be exhausted. Support for May is 4.42 with resistance at 4.57 and then 4.68.

Beans posted a lower low, lower high, and lower close, but similar to corn, posted a large recovery from intraday lows. The market is starting to correct from oversold with support at 10.00 and 9.80 with resistance at 10.08 and 10.22.

Corn made a solid recovery from lows yesterday after testing a major support level and is seeing modest gains this morning. Fundamentally, the U.S. still has a relatively tight balance sheet on strong export demand, but the outlook for trade is very uncertain due to tariffs. Next year’s balance sheets are forecast at more comfortable levels, but we still have to raise the crop. With that said, we still have a very large fund long in the market that is expected to emerge as a seller on rallies. Prices have potential to bounce further after hitting extremely oversold conditions, but be willing to sell into the recovery if sales are behind. If the 2018 trade war taught us anything, it is that it is important to be disciplined and reduce risk when the market gives opportunities…even if those opportunities aren’t as good as would be preferred.

Beans were also able to bounce from lows yesterday, but their recovery this morning has been subdued relative to the corn and wheat as Lutnik didn’t mention the China tariffs and China said they would seek alternative origins for ag imports. Even without the trade war beans had a bearish outlook on record Brazilian production. Beans are expected to underperform the corn and wheat moving forward. Make sure sales are caught up and buy puts to protect unsold bushels.

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Old crop corn up 5

New crop up 1

Old crop beans up 5

New crop beans up 2