Grain Spreads: Bean and Corn Grind
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Commentary
Initial enthusiasm for buying all grains particularly corn and soybeans subsided in the second half of the session today as the details of the trade deals were made public. With no appreciable impact on the current supply/demand situation from the trade, the market fell back on weather effects on US yields in my opinion. Weather forecasts have turned cooler for much of the belt in the next two weeks accompanied by rain. Ideal in most parts of the country. Perhaps more trade deals are coming that may spur demand but it’s important to note that we are supply side driven, with weather most important. That said, the trade deal with Japan is helpful but lacks specifics but the country did buy nearly $1 billion worth of US beans in 2024. However, the bean market is unlikely to get too excited until progress is made with China as they are the big fish. Underlying support will likely be evident on breaks over the next few sessions with China talks restarting in Sweden early next week. August is the key time for beans and weather forecasts can turn on a dime. Until more clarity is known or a bullish tilt on weather, look for funds to grind corn and beans lower. Dec corn needs to hold 4.12/4.10 this week or 4.03 maybe seen soon. 4.30 and 4.32 is the key resistance. Beans have major support at the 50-week moving average at 10.21. A close under and its 10.08 and 9.98. Resistance is 10.37 and then 10.61.
Trade Ideas
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Risk/Resistance
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
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