Corn and soybeans are trading higher, along with wheat early Tuesday.
Craig Turner, grain and oilseed analyst with StoneX, says corn and soybeans saw some early pressure on profit taking after hitting chart resistance and some farmer selling was also noted, both from U.S. and South American producers.
However, corn and soybeans quickly rebounded into new highs for the move still working in the shock of the WASDE report but also trading South American weather and demand.
Hot dry conditions in Argentina and Southern Brazil are supportive and crop consulant Dr. Michael Cordonnier lowered his estimates for Argentina 1 MMT for both corn and soybeans.
Meanwhile CONAB raised soybean production in Brazil by 110,000 MT to 166.32 MMT, but lowered corn 80,000 MT to 119.6 MMT.
On the demand front corn export inspections were a marketing year high yesterday and China has been in two days in a row for a total of 14.6 million bu. of U.S. soybeans.
Funds extended their long position in corn to 263,000 contracts as of Tuesday’s CFTC Commitment of Traders report but Turner says are estimated to be long 300,000 and they are likely flat in soybeans now.
So does that dictate corn will exceed $5 and soybeans $11?
He says corn could certainly get above $5 but will need some production issues in other areas of the globe to do it.
Meanwhile, soybeans still have the headwind of tariffs and the crop in Brazil is still a record even with some minor production losses.
The Brazilian real is also hitting new lows to the U.S. dollar which is making their soybeans cheaper in the world market.
Turner says the wheat market is following the rally in corn and soybeans again on Tuesday but recently has been limited by new highs in the U.S. dollar index which is tempering export demand.
