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| A pretty disappointing day ahead of tomorrow’s USDA report. As all the grains close essentially lower. March beans were up +13 cents early on but closed unchanged. Corn was slightly lower while wheat took a little beating.
We got our first flash sale of the year this morning, with a sale of 175k metric tons of corn to Mexico.
The weekly export sales were terrible across the board.
We have a brutally color storm moving across the midwest with temps below 0 degrees. In areas that don't have snow cover, there is the potential threat of winter kill for the wheat crops. The market doesn't see this as much of an issue.
Tomorrow we have the highly anticipated USDA report.
It seems like nearly everyone is expecting a fairly bearish report.
This report can bring surprises. So what are some surprises to look out for?
The trade is expecting US yield to come in unchanged from November. No one is expecting yield to increase. So yes, that is a possibility and a risk. Especially considering all of the areas where it looked like they wouldn't have much of a crop end up having a decent one.
On the other side of things, I am hearing some talk that they might lower soybean yield slightly by a tenth of a bushel. Now this wouldn’t be crazy bullish by any means, but this would make a slight impact to our already tight carryout situation.
Wheat seedings is another one to look out for. This has brought some surprises over the years. Last year the market was shocked as they came in +7% higher than the expectations.
The biggest thing everyone will be watching for is South America, Brazil in particular.
This morning Brazil consultancy Patria Agronegocios put out their estimates and they are some of the lowest I have seen.. They have beans at 143 vs their previous estimates of 150.7
Yesterday the CONAB had their numbers at 155.27 for beans and 117.6 for corn.
How does this stack up vs the USDA pre report estimates?
USDA trade estimates have 156.26 for beans and 125.33 for corn.
Everyone expects the USDA to come in higher than CONAB did.
So for beans it seems like most expect us to come in right around the estimates.
For corn however, there is a big discrepancy. CONAB had 117.6 and trade is looking for USDA at 125.33.
When we go into these reports we often have to ask the question ”what is the market not expecting” cause often times that is exactly what the USDA will give us….
Listen and read todays pre-report breakdown where we go over different scenarios we could see tomorrow and how each would impact the markets. We also go over exact strategies different situations can utilize to capitalize on tomorrows report
Listen/Read Here: https://txt.so/52ZZ1T
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Market Comments - USDA Tomorrow
