Markets are under pressure to start the week after the Pro Farmer Crop Tour confirmed record potential for national corn and bean yields with the beans exceeding the previous USDA estimate by quite a bit. September first notice day is on Friday, with longs in the market needing to sell or roll positions by the close on Thursday to provide overhead resistance on the market.
The Pro Farmer Crop Tour final results were out after the close on Friday. They estimated national corn yield at 181.1 bpa (USDA 183.1) and national bean yield at 54.9 bpa (USDA 53.2). Leaving the USDA’s current demand numbers unchanged, that would produce U.S. corn ending stocks near 1.9 billion bu. and bean stocks near 700 mbu.
Friday’s CFTC reports showed on the week ending 8/20, managed funds were net sellers of 9k corn to push the net short out to 258k, net sellers of 8k beans to push the net short out to 183k, and net buyers of 20k wheat to reduce the net short to 53k. The net short positions for corn and beans were slightly larger than expected while the net short in wheat was much smaller than expected.
Funds on Friday were estimated as net sellers of 3k corn to push the net short out to 266k, net buyers of 6k beans to reduce the net short to 187k, and net sellers of 4k wheat to push the net short to 66k.
Global wheat markets remain under pressure to start the week with offers out of the Black Sea region driving most of the price action.
Canadian rail workers have ended their strike, which had potential to greatly impact movement of grain and fertilizer throughout the country.
Ag Rural reported that Brazil’s first corn crop planting has reached 4.2%, which is slower than the 7.5% that had been planted at this time a year ago.
The EU lowered their corn production to 60-61 mmt, which is down from 63 mmt a year ago as hot weather in eastern Europe has stressed crops.
Corn finished at the bottom of the recent range on Friday and is pushing to new lows this morning with the market on the verge of regaining the downtrend if it can’t recover. The market is oversold with Dec. support 3.70-3.75 and resistance 3.90.
Beans gapped open lower last night and have chopped sideways since then with prices holding within the range that we’ve seen for the last couple weeks. The downtrend is still in place with overbought/sold indicators neutral. Support for Nov. is 9.50 and resistance is 9.80.
Corn is set to start the week with losses as pre-first notice day selling is driving the weakness. The Pro Farmer yield can be viewed as a bit supportive as that would drop U.S. ending stocks below 2bbu, but money-flow is driving the trade right now with rolling and selling of September contracts dominating the price action. The downside risk from here is not viewed as that large, but we probably have to get closer to the close on Thursday for the selling pressure to ease.
Beans were able to stabilize for much of last week as we have finally started to see some pretty good export demand emerge from China, but the bearish yield estimate from Pro Farmer seems to be leading the losses this morning with prices back near recent lows. The trend is lower and the supply fundamentals are still bearish.
Corn down 5-6
Beans down 8-10