Markets are trading mixed overnight with corn and wheat hitting new recent highs on Russian and Australian wheat production concerns while beans are pulling back as harvest pressure weighs.
Managed funds on Tuesday were estimated buyers of 8k corn to reduce their net short to 105k, net buyers of 7k beans to reduce their net short to 51k, and net buyers of 5k wheat to reduce the net short to 18k.
Russia’s 10th largest grain-producing region, Oryol, declared a state of emergency due to drought that is hurting winter crop areas.
Russia also banned the transit and import of Kazakh grain, which was believed to be in retaliation for a ban on Russian grain supplies. Kazakhstan was expected to export 9mmt of grain this year.
Australian wheat production estimates are dropping as cold weather and dryness is hurting their crops as they come out of dormancy. Private production estimates are dropping near 27-30 mmt (USDA 32).
Ukraine reported a Russian drone attack on a Danube river port in Odesa.
The strike by the International Longshoremen’s Assn. is entering its second day, disrupting port shipments from Maine to Texas.
Stone X raised their US national corn yield forecast to 184 bpa (USDA 183.6) and national bean yield to 53.5 bpa (USDA 53.2).
Corn posted a higher high, higher low, and higher close on Tuesday and is hitting new recent highs overnight. The market is overbought, but has cleared the major 4.20-4.30 resistance area. Support is now seen at 4.20 with the next resistance area 4.41.
Beans posed a lower low, lower high, and essentially unchanged close on Tuesday with the market finishing weak. The uptrend is in place, but the market is correcting after hitting overbought. Support is 10.30 and 10.40 with resistance 10.70 and 10.80.
Corn is hitting new highs this morning, following the lead of the wheat market, which is trading higher on smaller global production estimates. In the near-term, corn is expected to run into some resistance as harvest ramps up, but longer term, the outlook is constructive as smaller production estimates in the US mean that the market will be sensitive to any weather concerns in South America this winter or the US next summer. With that said, make sure any sales that need to be made at harvest are caught up as it is hard to believe the current strength is sustainable as a record US crop starts to hit the market.
Beans are pulling back this morning as spreaders buy corn/wheat and sell beans as US harvest picks up and new crop beans are sold into the market. The fundamental outlook for beans remains very bearish with South America needing to have major production problems for the global balance sheets to have a chance to get tight. Producers should make sure any sales that need to be made at harvest are caught up and consider downside protection on any unsold production.
Corn up 2
Beans down 10