Markets are trading lower across the board overnight with beans approaching the lows that we traded last August on favorable South American weather with corn and wheat under pressure as well. Outside markets have crude trading essentially unchanged on the day while equity futures are bumping up against the all-time highs that were traded earlier this week after the European Central Bank said they would cut interest rates by 25 basis points for the first back-to-back cuts in 13 years in an effort to stimulate their economy.
Managed funds on Wednesday were estimated as net buyers of 6k corn to reduce the net short to 44k, net sellers of 5k beans to push the net short out to 42k, and net buyers of 3k wheat to reduce the net short to 33k.
Export sales and EIA data will be delayed until tomorrow due to Monday’s holiday.
Russia said they would ban Kazakh grain imports for its own market, but said they would allow their grain to transit grain via Russian territories.
USDA reported their largest flash sale of corn in nearly a year to Mexico yesterday morning, which is a good sign for demand, but more large sales will need to be seen to significantly change the supply/demand outlook.
The Buenos Aires Grains Exchange raised concerns that persistent Antarctic polar winds could further dry out the country’s agricultural heartland in the coming months with corn and wheat production at greatest risk. The Rosario exchange recently lowered Argentina’s wheat production to 19.5 mmt (USDA 18).
Corn traded an inside day on Wednesday with prices finishing higher, but those gains have almost completely reversed this morning. The market is oversold with support at $4 and resistance 4.20-4.30.
Beans posted lower lows, lower highs, and new low closes for the current move with the market seeing follow-through to the downside this morning. The market is oversold as it approaches the lows from August. Support is now 9.50-9.60 and resistance 9.80.
Corn is approaching the $4 level again overnight with weakness in the beans pulling on the corn. The outlook is unchanged with downside risk not viewed as that large from here, but upside is also expected to be capped in the 4.20-4.30 area until we get through more harvest. Longer term, the US and global balance sheets are tight enough where prices are expected to be sensitive to weather scares, which need to be viewed as selling opportunities when they happen. Producers can consider longer-term re-ownership strategies for previously sold grain.
Beans are approaching the lows from August as South American weather is bearish and US supplies flush right after harvest. Beans have the weakest fundamentals moving forward and are expected to trade accordingly. With that said, the move to the downside is getting to be a bit overdone, so producers can hold off on new sales and/or downside protection for now.
Corn down 2-3
Beans down 10-12