Markets are mixed this morning with prices recovering from overnight lows after selling emerged early in the session last night. The initial weakness in beans and bean oil was likely related to biofuel rumors and what subsidies would look like in the bill that passed in the house early this morning. Corn has been able to trade higher while wheat and beans are still lower.
Equity markets sold off hard on Wednesday following a disappointing 20-year U.S. bond auction. Interest rate futures have traded lower since the House passed the bill this morning, which has pulled equity markets lower this morning as well.
Export sales this morning for wheat came in at -13.4 tmt (-200-100 expected), n/c wheat 882.2 tmt (300-700), corn 1,190.8 tmt (700-1,600), n/c corn 218.4 tmt (50-500), beans 307.9 tmt (100-300), n/c beans 15 tmt (90-400), meal 359.6 tmt (100-400), n/c meal 23.1 tmt (0-50), and oil 13.7 (0-32).
Excellent new crop wheat sales while new crop corn/bean sales were a bit disappointing. Old crop corn sales were near the middle of expectations, but below some of the big numbers that we have been seeing.
Managed funds on Wednesday were estimated as net buyers of 10k corn to reduce the net short to 57k, net buyers of 6k beans to push the net long back out to 34k, and net buyers of 2k wheat to reduce the net short to 109k.
Weekly EIA data showed ethanol production rebounded by 43k bbls per day to 1,036k bbls with stocks off by 501k bbls to 24,944k. Weekly production of 305 was closer to the number necessary to stay on track to hit the USDA’s usage forecast.
Agroconsult updated their forecast for Brazil’s 2nd corn crop to 112.9 mmt, which is up 10.5% from last year’s 2nd crop.
Sovecon raised their Russian wheat production forecast to 81 mmt (USDA 83). They mentioned depleted moisture reserves in their top growing areas.
The Illinois Wheat Association hosted a 1-day crop tour and reported a better crop than a year ago, but it is also disease prone due to wet weather. They estimated an average yield of 106 bpa, which is just above the average yield from last year of 104 bpa.
Corn posted a higher high, higher low, and higher close again on Wednesday with the market continuing its bounce from last week’s lows. The market is getting to be a bit overbought after recent gains with the market running into resistance near 4.60 this morning. Support is below the market at 4.40.
Beans posted a higher high, higher low, and higher close on Wednesday with prices recovering within their recent range. Most indicators are neutral now with support for July 10.40 and resistance 10.60 then 10.67.
Corn has seen an impressive recovery from the lows traded early last week as focus has shifted to ongoing strong export demand and slow planting pace across parts of S. IL, S. IN, and OH. The market has recovered to resistance levels, so we may need to see some consolidation before the move to the upside can continue.
Beans gapped open lower overnight on biofuel rumors. They’ve seen a nice recovery from the overnight lows, but at the end of the day, the market is range-bound. With June options expiring tomorrow, look for the market to struggle to get much momentum going in either direction through the end of the week. The longer-term outlook for record global supplies is bearish. Producers can look at option strategies to establish floors.
Corn mixed
Beans down 2-4