Markets are trading higher overnight with wheat seeing the best gains after Friday’s CFTC report showed managed funds were sitting on a larger than expected short position.
Friday’s CFTC report showed that for the week ending 12/17, managed funds were net sellers of 6k corn to reduce the net long to 159k, net sellers of 17k beans to push the net short out to 76k, and net sellers of 21k wheat to push the net short to 87k. The selling in wheat and beans was greater than expected while the corn position was in line with expectations.
Funds on Friday were estimated as net buyers of 8k corn with the long now estimated at 164k, net buyers of 9k beans to reduce the net short to 76k, and net sellers of 1k wheat with the net short estimated at 95k.
A trade-dispute panel ruled on Friday that Mexico’s restrictions on U.S. GMO corn exports violated the US-Mexico-Canada agreement. The panel found that Mexico’s restrictions were not based on science.
Mexico’s president said she expected their Congress to approve a ban early next year on planting genetically modified corn.
Russia on Friday confirmed that they had cut their wheat export quota for the 2nd half of the marketing year by 63% from a year ago. They said, “The decision was made taking into account the projected balance of production and consumption of grain crops in the domestic market.”
Farmer support payments that were part of the government funding bill that was agreed upon are estimated to be in the $43/acre range for corn, $30/acre for beans, and $30/acre for wheat. The details are still a little cloudy, however.
Russian rail carrier Rusoagrotrans said the country would export 29.4 mmt of wheat in the first half of their marketing year as shipments surge ahead of export restrictions that are expected in the 2nd half of the marketing year. Shipments in the first half of last year’s marketing year were 27.7 mmt.
The U.S.$ posted a major bearish reversal on Friday. It is trading higher this morning but remains well-below Friday’s highs.
Corn posted higher highs, higher lows, and a sharply higher close on Friday with the market seeing follow-through overnight to push prices to the upper end of the range. The market is hitting an old trendline resistance right now. Support is 4.30 and resistance 4.50.
Beans posted a higher high, higher low, and sharply higher close on Friday with the market approaching the 9.80 area that was good support from October through early December, but that is now resistance. The market has corrected from oversold. Resistance is 9.80 and support 9.50.
Corn finished last week firm with ongoing strong demand, limited farmer selling interest, and dryness in Argentina all factors. The market is approaching the 4.50 area again, which is where producer selling picked up last time around. The range trade is expected to continue. Producers can look at 0-cost option strategies to protect downside price risk on unsold bushels.
Beans saw an eventful trade last week with the market breaking out to the downside after support at 9.80 gave away, but then the market recovered into the close on Friday with prices testing that support turned resistance area this morning. South America still looks to have a big crop coming with supply exceeding demand. Producers should look at using puts to cover downside risk on unsold bushels.
Corn up 1-2
Beans up 1