Markets are trading mostly lower this morning with beans coming under pressure right after the open last night while corn and wheat have seen a more sideways trade. Yesterday’s CFTC report showed much greater buying than expected in the corn and beans, which is likely contributing to the overnight weakness.

The weekly CFTC report showed that for the week ending 12/31, managed funds were net buyers of 68k corn to push the net long out to 229k, net buyers of 25k beans to reduce the net short to 42k, and net buyers of 8k wheat to reduce the net short to 87k. The buying in corn and beans was much greater than expected while the wheat position was in line with expectations.

Managed funds to start the week were estimated as net buyers of 12k corn to push the net long to 228k, net buyers of 5k beans to reduce the net short to 47k, and net buyers of 4k wheat to reduce the net short to 93k.

Soybean prices swung around on Monday with reports that Trump may be easing his stance on tariffs early in the session but pulled back on reports that that wasn’t true.

Rabobank put out a report that beans could drop below $9 if we enter another trade war with China.

Winter wheat ratings in KS dropped from 64% g/e in November to 54% g/e yesterday.

Indonesia said they would impose import quotas on feed wheat to protect their domestic corn prices.

The national yield estimate on Friday’s report is 182.7 bpa for corn and 51.6 bpa for beans, both of which would be down slightly from the Nov. estimate. A full rundown will be sent out later this morning.

Corn posted a higher high, higher low, and higher close to start the week with the market bouncing off trend support and recovering most of Friday’s losses. The market tested trend support overnight, which has held so far. The market is starting to correct from oversold, which could lead to more near-term weakness. Support is 4.53 and 4.40 with resistance 4.60.

Beans trade an inside day on Monday with prices surging Sunday night but pulling back to finish in the lower end of the day’s range. There is more room to trade lower as the market swings from overbought to oversold. Support for March is 9.80 and resistance 10.00.

Corn is pulling back modestly this morning but remains in the upper end of the range that we’ve seen over the last several months. Managed funds have built their largest net long in over 2 years and have priced in a lot of bullishness. A shockingly bullish report from the USDA, corn is expected to struggle to add value from here as we enter the period of the year when a lot of grain typically moves off-farm. Producers should look at zero-cost option strategies to protect their downside risk.

Beans tried to rally to start the week on dryness in Argentina, but prices pared gains into the close. The CFTC report showed much larger short-covering than expected and prices have been under pressure for the entire night session. With global supplies still on track to build this year, producers should look at puts to protect unsold bushels.

Corn down 2-3

Beans down 9-10