Markets are trading higher this morning with wheat leading the move to the upside after pulling back from highs yesterday after a relatively uneventful reaction to the crop report.
The USDA surprised the market with a 0.5 bpa upward revision to U.S. corn yield. They left bean yields unchanged with very limited changes to the bean balance sheets as they wait for more yield data.
Managed funds on report day were estimated as net buyers of 4k corn to reduce the net short to 179k, net buyers of 8k beans to reduce the net short to 151k, and net even in the wheat to leave the net short at 41k.
NOPA crush for August will be out on Monday at 11:00 a.m. with another big usage number expected.
Ukraine accused Russia of attacking a civilian grain vessel that was carrying Ukraine wheat in the Black Sea. The Kremlin declined to comment following the accusation.
The Buenos Aires Grain Exchange said Argentine wheat areas were in need of rain in the coming weeks with western growing areas experiencing stress. The National Weather Service said there was a 71% chance that La Nina would develop during the Sep. to Nov. time period. EarthDaly Agro said the Brazilian states of Parana and Mato Grosso were experiencing their driest soil moisture levels in 30 years.
French corn was rated 79% g/e, which was unchanged from last week.
Corn posted an outside up day on report day with prices flushing lower, but then recovering to finish higher on the day. The market is working into the upper end of the recent trading range this morning with the market able to hold above trendline support. Directional indicators are neutral with room to trade higher before the market will be overbought. Support is 4.00 and resistance is 4.20-4.30.
Beans posted a higher high, higher low, and higher close on report day with the market seeing follow-through buying overnight with prices testing 50 DMA resistance this morning. There is room to trade higher before the market will be overbought. Support is 10.00 and resistance is 10.20-10.30.
Corn performed well on report day, finishing higher despite the USDA’s forecast for a new record corn yield. There is skepticism that we will achieve that yield and even if we do, a U.S. carryout near 2 bbu isn’t overly bearish from current price levels. With that said, harvest pressure is expected to emerge if December makes a run at the 4.20 area with a range-bound trade expected.
Beans had a neutral report yesterday relative to expectations with the market currently adding some value on Brazilian dryness as they start planting their crop. The bean fundamental outlook is still bearish with beans expected to underperform the corn and wheat markets moving forward.
Corn up 6
Beans up 7-9