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| The biggest thing this week is the upcoming USDA Outlook Forum.
Most are expecting pretty bearish numbers because this report tends to be bearish.
The general talk is lower farm income. Which means bigger production numbers and larger stocks.
Analysts are expecting corn acres to come in a little smaller than last year, while expecting soybeans to come in a little higher. However, if you plug in the yield on corn to go along with demand, will very likely still be at a massive carryout.
Below is a poll from 21 analysts at Bloomberg. These numbers are the analysts own numbers, not what they think the USDA will say. (image below)
If the USDA agrees with these analysts, they have soybean ending stocks up an aggressive +33% from last year.
They also see corn carryout to be a whopping 2.49 billion bushels.
If these numbers are even close, the US is going to need a lot more demand. Because overall, these numbers do not look good at all.
The funds still hold some of their shortest positions on record in both corn and beans.
They are short around -140k contracts of soybeans. The shortest ever only behind 2019's -169k contracts.
They are short around -300k contracts of corn. The shortest all time for this time of year, and very very close to approaching their shortest all time from 2019.
Some think that we may see the funds cover following this report simply due to how much bearishness is already priced into these markets.
Next let's take a look at weather here in the US.
Many of primary growing areas are having their warmest February on record. Temps +20 degrees hotter than normal for many areas. (image below)
From November until now is also the hottest on record for this time frame. (image below)
Why does this matter?
Well what if this same pattern occurs this summer?
The official probabilities for La Nina are actually expecting La Nina to be in full effect come May and June. (image below)
This would bring hotter and drier weather if holds true. Still too early to make bold predictions, but could certainly be a big potential wild card looking long term.….
Read the rest of todays update where we go over this upcoming USDA outlook forum, what happened the last time Brazil had a drought, why wheat spreads are friendly & more
Read Here: https://txt.so/fSj4d4
Below is analyst numbers, average temp for February so far, temperature rank for Nov-Feb, and La Nina probabilities
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Attachments
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 IMG_0769 (full).PNG (64KB - 382 downloads)
IMG_0770 (full).PNG (105KB - 382 downloads)
IMG_0768 2 (full).JPG (122KB - 271 downloads)
IMG_0772 (full).PNG (44KB - 408 downloads)
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Market comments - La Nina, funds, & USDA outlook forum
