Markets are trading lower overnight with beans leading the weakness on an improving rain outlook for Brazil and follow-through after closing soft on Friday.
Friday’s cftc report showed that for the week ending 10/1, funds were net buyers of 63k corn to reduce the net short to 68k, net buyers of 40k beans to reduce the net short to 35k, and net buyers of 4k wheat to shrink the net short to 23k. The buying in both corn and beans was quite a bit more than expected with the fund short in corn the smallest since September 2023 and the bean short the smallest since last June.
Funds on Friday were estimated as net sellers of 5k corn to push the net short out to 73k, net sellers of 5k beans to push the net short to 47k, and net sellers of 5k wheat to push the net short to 25k.
USDA will be out Friday with their October supply and demand updates with a focus on US corn/bean production, which is expected to be lowered. A rundown of pre-report estimates should be out mid-week.
Ukraine reported they had exported 11.2 mmt of grain thus far through the 2024/25 marketing year, which is up from 7.2 mmt at the same time a year ago.
Russia’s RIA news agency said their wheat production would be impacted by bad weather and the Ukraine war on grain-producing regions near the border.
Ukraine said a missile strike over the weekend damaged a vessel loaded with 6 tmt of corn over the weekend.
Dryness in Brazil continues to hamper shipping efforts in the Amazon rain forest with water levels in the Amazon rain forest’s largest city of Manaus dropping to the lowest levels since 1902.
Ag Rural reported Brazil soybean planting at 4.5% complete vs.10% a year ago. Mato Grosso planting is seen at the slowest pace since 2015/16. For reference, Brazil bean production that year totaled 95.5mmt vs. the USDA’s initial estimate of 97mmt, and Brazil corn production totaled 67mmt vs. the USDA's initial estimate of 75mmt. The USDA currently estimates Brazil bean production at 124.81mmt and corn 127mmt.
China reported that their hogs slaughtered by pig enterprises fell 7.7% in August compared to the prior year. Their sow herd was estimated down 4.8% on the year.
Corn lost its uptrend on Friday, posting a lower low, lower high, and lower low as the market is correcting from overbought. The market is testing support this morning near 4.20 with the next support at 4.00. Resistance is 4.41.
Beans lost their uptrend on Friday with the market posting lower lows, lower highs, and a lower close. The market gapped open lower overnight and tested support at the bottom of the recent up-channel before bouncing. The market is approaching oversold after the drop. Support is 10.20-10.30 and resistance 10.40 then 10.80.
Corn continues to correct from last week’s highs as a wide-open harvest window across the US means a lot of corn is expected to hit the market in the coming weeks. The price outlook is unchanged with a range-bound trade expected in the near-term with harvest pressure expected to limit upside while uncertainty regarding the size of the US crop is expected to be supportive on pull-backs.
Beans gapped open lower overnight following the soft finish last week as US harvest is expected to weigh on prices over the next few weeks and the rain outlook for South America has improved. Beans have the weakest fundamental outlook on building global supplies. Look for beans to underperform the corn and wheat markets moving forward.
Corn down 1
Beans down 4