Markets are trading mixed this morning with corn and wheat seeing small losses while beans are seeing small gains, although they are trading well-below their overnight highs.
Managed funds on Tuesday were estimated as net sellers of 10k corn to put the net position at short 3k, net buyers of 2k beans to put the net long at 52k, and net buyers of 1k wheat to reduce the net short to 125k.
Private analyst Ag Resource group reportedly estimated that U.S. soybean exports could drop as much as 20% from the USDA’s current new crop forecast of 1.865 bbu unless a trade deal with China can be made.
France Agrimer raised their 2024/25 wheat export forecast to 3.2mmt, but that would still be their smallest export number since records began for the 1996/97 marketing year.
The KS Wheat tour found better yields than a year ago on the first day. The average yield was 50.5 bpa vs. 49.9 bpa last year.
Soybean gains on Tuesday came on the heels of a sharply higher bean oil market that was supported by a proposal that would extend the clean fuel tax credit, which is driving the expansion of renewable diesel usage, would be extended to 2031.
Mexico said they would take measures to slow the flow of southern cattle in to the country to limit the spread of screwworm, but they said they wouldn’t completely close their southern border.
China and Brazil signed an agreement that would allow Brazil to export DDG’s to China, which is a market that historically has been dominated by the US.
Egypt and Russia are working on agreements for Egypt to import larger quantities of Russian wheat, corn, and soybeans.
Ukraine’s state weather forecaster said frost and drought in southern growing areas had killed some winter wheat.
Corn posted another lower low, lower high, and lower close on Tuesday with the market continuing the move to the downside in old crop while new crop is seeing more of a consolidative trade. The market is oversold after recent losses with support near 4.40 and resistance 4.60.
Beans posted a higher high, higher low, and higher close on Tuesday with the market making a large recovery from intraday lows to finish with small gains and then seeing follow-through to new recent highs in early trade last night. The market is overbought. Support for July is 10.60 and resistance 10.80.
Corn remains under pressure this morning as fast planting pace and a lack of weather concerns on a national level are limiting buying interest. Old crop corn supplies are relatively tight, but managed funds have turned to willing sellers as the technical picture has gotten worse. With that said, we are entering the time period when the selling is expected to ease as focus shifts to U.S. summer weather. Heavily sold producers can look at re-ownership strategies that will work if we see a seasonal weather rally into the mid-June/early-July time period.
Beans posted an impressive rally from intraday lows yesterday with prices following a rally in bean oil that was sparked by positive biofuel news. There was equally impressive follow-through in early trade last night with the market hitting long-term resistance at 10.80 before pulling back to limit gains this morning. The outlook for U.S. crush demand has been and continues to be very good on expansion of the U.S. renewable diesel industry, but the outlook for U.S. soybean exports is much more uncertain as the U.S./China trade war is ongoing and global stocks are forecast at record levels. With prices nearly $1 off the early April lows, producers should push old and new crop sales further along.
Corn down 2-3
Beans mixed