Corn: 2 to 3 lower
Beans: 3 to 4 lower
Corn saw some correction yesterday as it was pulled lower by weakness in the wheat market and lower ethanol margins as corn prices have increased. The corn market had become technically overbought, so profit taking was expected. However, the fundamentals of the corn market are still strong and will likely be supported given any setbacks. Additionally, the USDA cut the Black Sea region’s production, which would indicate more demand coming to the U.S. For the next couple of months, the trade will focus on demand and South American weather. Corn is trading lower this morning as the trade continues to take a little profit off the top and reduce their substantial long position.
The soybean market was able to close higher yesterday supported by strength in the cash market and by the strength in the bean oil market although the rally was stopped short when meal was unable to push up into new high territory. The soybean oil market has become very bullish as Malaysian Palm oil is at a 4-year low and exports are at a 5-year high. That would indicate beans would be supportive and U.S. crush margins will stay strong if that continues. Argentina weather was mostly dry over the past 24 hours with coverage looking better now for the next five days. Brazil was mostly dry yesterday as well, with coverage looking strong there through the weekend also. Continued dryness is expected in the southern part of the country as well.