Markets are trading mixed overnight with beans giving back most of Friday’s gains, which was sparked by reports that China that could reduce their exports of used cooking oil. Used cooking oil has been a major feedstock for the US’s renewable diesel industry.
Friday’s CFTC report showed that on the week ending 11/12, funds were net buyers of 88k corn to push the net long out to 110k, net buyers of 16k beans to reduce the net short to 55k, and net sellers of 15k wheat to push the net short to 45k. The buying in corn was much greater than expected while the bean and wheat positions were near expectations.
Funds on Friday were estimated as net buyers of 7k corn to push the net long out to 102k, net buyers of 8k beans to reduce the net short to 60k, and net buyers of 3k wheat to reduce the net short to 52k.
December options will expire on Friday.
The Biden Administration over the weekend said that Ukraine could use U.S. weapons to fire long-range weapons into Russia following a pickup in Russian attacks on Ukraine and in response to Russia’s deployment of North Korean ground troops.
AgRural reported Brazil bean planting 80% complete, which is ahead of last year’s pace of 68%. They reported some crop stress in South Brazil, where rains have not been as good as in center-west Brazil.
Chinese exporters of a wide range of products from aluminum to used cooking oil are expected to raise prices and renegotiate contracts to as their costs are going up after China cut tax incentives.
Corn posted a reversal from lows on Friday with prices getting back above trendline support. The market is back near the middle of its recent range with directional indicators balanced. Support for December is 4.20 and resistance 4.24 then 4.30.
Beans traded an inside day on Friday with prices bouncing from oversold to test resistance at the 20 DMA. The repeated tests of the bottom of the recent range suggest an eventual push to new lows for beans. Support for January is 9.80 and resistance 10.00.
Corn saw a nice bounce from its lows on Friday, but the market continues to be very range-bound with little news on the radar that could push it out of the current range. Funds have been active buyers, but enough grain has been sold into the market to keep a lid on prices. Strong demand and uncertainty over the size of South American crop are supportive while balance sheets that still project adequate supplies are an upside limiting factor. Look for the range-trade to continue for now.
Beans saw a nice bounce from recent lows on Friday, but nothing has changed in the bigger picture outlook, which is for growing global supplies and potentially lower prices. Unless the South America sees an historical crop failure, global supplies are going to be very comfortable. Producers can continue to look at puts to protect unsold bushels.
Corn down 1-3
Beans down 7-10