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| Corn and soybeans both under pressure early, making new lows before ending the day higher while the wheat market rallies, nearly erasing yesterday's heavy losses.
Overall there was no major news. Really just a turnaround Tuesday with most of the markets being in oversold territory, especially corn and beans. So mostly some fund short covering and pre report positioning.
Yesterday the sell off in wheat was due to moisture and snow cover in the plains. Today a little bit of strength is coming from ships avoiding the Red Sea as well as some talk about potential winter kill coming next week.
Tomorrow morning we will have the newest CONAB numbers out. So we will have to see what kind of cuts they make to Brazil production. The majority of people are expecting numbers in the 154 to 155 range for yield tomorrow.
Then we have the highly anticipated USDA report Friday. Most expect the USDA's numbers to be higher than that of the CONAB.
Friday we will be getting a ton of new data for both bulls and bears to chew on.
We will be getting supply and demand numbers, stocks, final yields for the US crops, and updated South America yields.
First let's take a look at the US numbers. The trade is expecting yields to come in unchanged from last report. With corn at 174.9 and soybeans at 49.9 bushels an acre.
Typically, this report offers more excitement than what these estimates are showing.
Now South America. These are the most highly anticipated numbers and will likely have the largest impact on what direction the markets move Friday.
We have some wide ranges expected.
Argentina's crop is seem essentially steady to slightly higher from last month.
Brazil's crop is expected to take some hits. But how big of a cut is enough to ration demand is the question.
The USDA is expected to peg their soybean crop at 156.26 vs last month's 161 and last year's 160. However, the estimate ranges from 151 to 161, a very wide range. If we fall too heavily to either side of those estimates we could see a big move Friday.
The trade has their Brazil corn at 125.33 vs last month's 129 and last year's 137. Again, we have another huge range for this crop as well. Even larger than the soybean one as they the range stands at 117 to 129.
Let's take a look at what some of the others in the industry have their estimates pegged at.
• Grupo Labhoro: 145 to 147
• Agricomp: 149.5
• Safras & Mercado: 151.4
• Pine: 149.9
• Ag Resource: 150.72
• Dr. Cordonnier: 151
• StoneX Brazil: 152.8
It is pretty clear that the USDA seems to have the most optimism for this crop.
With the pre report estimates at 156 for beans, we would likely have to have a number 155 or lower for the market to see any excitement. If we come in anywhere near the rest of the estimates above, we would be off to the races. However, I as well as nobody else excepts them to make that big of cut. We all know how they typically operate.
We all know Mato Grosso has some major problems with their record drought. But what about Parana? The state to the south that had been getting good rains all year long? Parana is the 3rd largest producing soybean state in Brazil.
Reuters just reported that the newest crop evaluations dropped their crop conditions from 86% rated good to excellent last week, all the way down to 71% this week. This was due to the recent dry stretch. That is a major drop in just a week, and they actually received rains for a good chunk of the growing season. It just makes one wonder how these crops that didn’t get much rain the past 3 months are holding up, and how big of improvements the recent rains can bring.
It was also reported that Parana planted only 309k hectacres for their first crop corn. This is the smallest acreage on record for their first corn crop…..
Read the rest of today’s market update and USDA report preview where we go over what’s happening in the market and what to be watching before/after the report and some things we could see
Read Here: https://txt.so/1beosW
Friday's Report Estimates Below*
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Market comments and USDA preview
