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| Corn and soybeans lower ahead of tomorrow’s USDA report as corn makes a new contract low. Trading to the lowest level in 3 years.
Tomorrow we don’t just have the USDA. We also get the CONAB numbers in the morning (South America's USDA) along with Stats Canada. So we will get a good data dump and tomorrow will be very interesting.
It is currently the Chinese New Year, so do not expect much business to be done out of China right now.
Why were lower today?
Argentina is expected to see some good rains that are expected to continue throughout the weekend to go along with cooler temps.
Then we have the funds and traders doing some pre-report positioning. Despite a lot of bearishness already priced in, the funds continue to pound the grains lower and won’t take their finger off the sell button. As we haven’t gotten any short covering.
The funds are now short nearly -300k contracts of corn. Which is a massive amount. The most ever for this time of year and the most since 2019.
Now for the USDA report..
Despite the recent drought concerns in Argentina, the USDA sees their production getting bigger from last month. The estimates are:
Argentina Corn: 55.7 vs 55 last month
Argentina Beans: 50.8 vs 50 last month
Then despite the weather being pretty friendly in Brazil recently, the analysts see Brazil's crop coming in smaller than last month.
Brazil Corn: 124.3 vs 127 last month
Brazil Beans: 153 vs 157 last month
Argentina is supposed to get good rains. However, January rainfall was -18% less than normal and 90% of the rain came during the first two weeks.
Below is the past 2 weeks vs the next 2 weeks:
How much of this rain is too late… and how well did their crops hold up with the early rain?
Read the rest of todays update where we go over the USDA report, managing risk, Argentinas situation, the July forecasts for the US & more
Read Here: https://txt.so/QPMrmd
Below are the estimates as well:
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Market Comments - USDA Preview
