Markets are trading mixed this morning with wheat catching a small bid after crop ratings came in well-below expectations. Corn ratings disappointed too, but it is early enough in the growing season to have a limited impact.
Managed funds to start the week were estimated as net sellers of 3k corn to push the net short to 106k, net buyers of 2k beans to push the net long to 20k, and net sellers of 7k wheat to push the net short out to 119k.
The first week of corn ratings came in at 68% g/e (73 expected), corn planted 87% (88 expected), bean planting 76% (78 expected), spring wheat rated 45% g/e (71 expected), spring wheat planted 87% (90 expected), and winter wheat rated 50% g/e (53 expected).
A mission representing the USDA is expected to head to Mexico in the coming days with potential for the suspension on Mexican cattle imports expected to be lifted.
Old crop corn traded an inside day on Tuesday with the market finishing unchanged while new crop finished lower with prices dropping within the recent range. The market is a bit overbought with some consolidation possible in the near-term. Support for July is 4.40 and resistance is near 4.60.
Beans also traded an inside day on Tuesday with prices finishing with small gains. The market remains range-bound with the market well-balanced. Support is 10.40 and resistance 10.67.
Corn was able to bounce modestly overnight on lower-than-expected crop ratings, but the market is range-bound for now. There are some trouble spots in S. IL, S. IN, and OH, but on a national level, planting pace has been fast and dry areas have shrunk. This is the time when we typically see the market add some risk premium. Producers can look at zero-cost option strategies to establish floors while keeping some of the upside open.
Beans continue to see low-volatility, sideways trade with both buyers and sellers struggling to see follow-through in either direction. The global supply outlook is still for record supplies, which at some point may lead to more downside pressure. Producers should use options to establish floor prices.
Corn up 1-2
Beans down 3-4