Markets are trading lower across the board overnight with corn and beans retracing a portion of yesterday’s gains while an improved weather outlook for winter wheat in the US and Russia continues to weigh on that market. Corn and bean gains on Tuesday were mostly credited to the uptick in export demand that both market has seen over the last few days.
Managed funds on Tuesday were estimated as net buyers of 9k corn to reduce the net short to 68k, net buyers of 6k beans to reduce the net short to 39k, and net buyers of 2k wheat to reduce the net short to 26k.
Calendar spreads in beans are pulling back overnight after seeing big gains earlier this week on increased export demand. First notice day for the November contract is a week from today with pre-first notice day selling historically weighing on similar spreads.
Kazakhstan reported their 2024 grain harvest was nearly complete with total grain harvest estimated at 26.5 mmt with exports forecast at 12 mmt. Both numbers are up sharply from last year.
Russia officially proposed the creation of a BRICS grain exchange at a summit of leaders of BRICS countries. Putin said the exchange “will contribute to the formation of fair and predictable price indicators for products and raw materials, considering its special role in ensuring food security. The implementation of this initiative will help protect national markets from negative external interference, speculation, and attempts to create an artificial food shortage.”
The UN reported that Russian attacks have damaged 6 civilian vessels in the Black Sea with the British Prime Minister saying such attacks were delaying vital aid from reaching Palestine.
The EU reported soft wheat exports thus far through the current marketing year at 7mmt, which is down sharply from 10.22mmt at the same time a year ago.
Corn posted a higher high, higher low, and higher close on Tuesday with prices making a run at the 50 and 100 DMA’s before the rally slowed. The market is overbought after recent gains with directional indicators still neutral. Support is 4.00 and resistance 4.20-4.30.
Beans posted higher highs, higher lows, and a sharply higher close on Tuesday as the market corrects from oversold. The market still has a bearish directional tilt. Support for November is 9.68 and 9.55. Resistance is near 10.00.
Corn is pulling back overnight after strong export demand drove big gains on Tuesday. The 1-2 week outlook is unchanged with ongoing harvest pressure expected to limit further upside now, but longer term, US balance sheets are getting tighter and demand is robust. The market will be sensitive to weather scares in both South America this winter and the US next spring/summer, which will likely provide more favorable marketing opportunities than what the market is currently providing. Wait for a pull-back to re-establish upside exposure for previously sold grain.
Beans made a strong push higher on Tuesday with strong export demand firming up cash markets and sparking buying in flat price futures. While the rally was welcome, the bean supply outlook remains bearish with US and global supplies forecast at burdensome levels. Additionally, longs in the November contract will need to be sold or rolled to deferred months ahead of first notice day next week. Producers that are planning to roll basis contracts should do so now.
Corn down 1-2
Beans down 4-7