Markets are trading mostly higher this morning with corn and beans able to add to recent gains while a drop to new lows for the U.S.$ is helping to push wheat higher. China announced higher tariffs on the U.S. at 3 a.m., but markets quickly recovered after a brief spike lower.
Managed funds on report day were estimated as net buyers of 20k corn to push the net long out to 89k, buyers of 15k beans to reduce the net short to 32k, and net sellers of 3k wheat to push the net short to 113k.
The U.S.$ dropped to its lowest level since the spring of 2022 overnight with the index coming under pressure after the China tariff announcement.
China said they would raise tariffs on U.S. imports to 125% overnight.
The USDA surprised the market on Thursday with an upward revision to U.S. corn exports, which dropped carryout well-below expectations. Beyond that, major adjustments were limited with the market looking forward to the first 2025/26 balance sheets from the USDA on the May report.
Argentina soybean harvest is 2.6% with wet weather slowing their pace while corn harvest is 23.1% complete.
CONAB raised their Brazil soybean production forecast to 167.87 mmt (USDA 169), which puts their estimate closer to the USDA than we have seen the last few years.
Australia said western Australia grain area would decline by 9% this year due to a shortage of fallow land after seeing increased area in 2024.
Corn posted a higher high, higher low, and sharply higher close on report day with May finishing at the highest close since February 26th. The market is now trading near the mid-point of the range that we’ve seen this year with resistance near 4.85 and support below the market at 4.76 and 4.72.
Beans posted a higher high, higher low, and higher close on report day with the market able to push through some trendline resistance, which it has held above during the night session. The market is overbought after recent gains with May resistance 10.30 and support at 10.00.
Corn balance sheets got tighter on Thursday and prices went higher with futures now at their highest level since February. The increase in U.S. exports wasn’t a complete surprise but the drop in stocks was more than most were looking for. Old crop supplies in the U.S. and globally are tight, which is expected to provide support on pull-backs while expectations for big acres in the U.S. may limit some of the upside potential for new crop corn, at least until we start to trade summer weather in a couple months. With the big recovery that we’ve seen from recent lows, producers should make sure sales are caught up and look at establishing floors on new crop bushels.
Beans followed the corn market higher on Thursday with the market returning to the top of the range that we’ve seen over the last few months. There is a gap on the May chart from April 1st that the market is on the verge of filling. The trade action has been impressive considering global stocks are forecast record large, Brazil beans are flowing into the market, and China is likely to stop buying U.S. beans…partly due to the time of the year when they switch to Brazil but also due to the trade war. Make sure bean sales are caught up and look at puts to establish floors on unsold bushels.
Corn up 3-4
Beans up 3-7