AMIS also highlighted that money managers liquidated long positions in wheat and corn, "establishing modest short holdings for both." However, in the case of soybeans, "it added to its net short position m/m."
Grains such as soybeans, corn, and wheat are trading down on Thursday as investors are digesting the latest AMIS crop report and optimistic news about new trade talks.
The market sentiment improved considerably on Thursday. Investors welcomed the announcement of a new round of trade talks between the United States and China in October.
However, a new crop report showing that forecast for supply in grains was lifted sharply, “mostly reflecting a massive upward revision for the US,” pushed prices down.
According to the Agricultural Market Information System market monitor for September, “world maize production has been lifted sharply in view of a massive upward revision for the US. Rice production is also seen higher while wheat production is expected to increase to a record. In the case of soybeans, a projected year-on-year decline in output is unlikely to become a concern, as overall supplies remain adequate, especially given the dampening impact of African Swine Fever on feed demand in China.”
AMIS highlighted that money managers liquidated long positions in wheat and corn, “establishing modest short holdings for both.” However, in the case of soybeans, “it added to its net short position m/m.”
Futures of soybean are trading down on Thursday as investors are digesting the latest AMIS report. Improving supply expectations and long position liquidations are pushing prices lower.
Early in the day, soybeans traded higher to 8.78, intra-day high. But the news and a rejection of that level sent the unit down to 8.65. The contract of soy is now priced at 8.65, which is 1.10% negative on the day.
Technical indicators are suggesting more declines in the short and middle term. The next support is at 8.63, followed by the 8.60 area. Be aware of stop-loss triggering below 8.60.
Corn is trading positive on Thursday for the first time in the last five sessions as investors are digesting the AMIS report.
“In the US, the crop is progressing under mixed conditions across much of the corn belt due to the late sowing this season,” the report says. “Final yields will depend on how the weather performs over the next month.”
In this framework, futures of corn attempted to bounce from 3.56 per bushel, but the 3.61 level contained the unit. Corn is now trading 0.10% positive on the day at 3.58, but it is losing steam.
Wheat is performing its second day of gains on Thursday, but recent crop report news hurt the unit and it pared gains at 4.69.
The unit is now trading at 4.66, 1.03% positive in the day. Oscillators are suggesting a turn in the direction for the unit, but the 4.64 is supporting the contract. Watch out for the 4.60 area, followed by the 4.56 and 4.50 levels for supports.
Mauricio is a financial journalist with over ten years of experience in stocks, forex, commodities, and cryptocurrencies. He has a B.A and M.A in Journalism and studies in Economics by the Autonomous University of Barcelona. While traveling around the world, Mauricio has developed several technology projects focused on finances and communications. He is the inventor of the FXStreet Currency Poll Sentiment index tool.