GRAINS LOWER AS TRADE PREPARES FOR USDA

Written By Sebastian Frost

MARKET UPDATE

Prefer to Listen? Audio Version

Futures Prices Close


Overview

Grains end the day lower across the board.

At one point beans were up 15 cents, but ultimately broke 23 cents off those highs but managed to close down just a penny.

The corn market continues to chop around near the bottom of it's recent range. As we barely fight off new lows yet again today, making today the 3rd time we haves tested $4.68.

Wheat takes it on the chin following it's 4th straight day of gains yesterday.

Yesterday harvest came in at 81% complete for corn, 91% for beans.

Outside of South America weather, there isn’t much fresh news. So don’t be surprised to see choppy action be the theme until Thursday's USDA report. Along with the USDA report, we will also get fresh estimates from CONAB (South America's USDA).

When we take a look at these two reports, yes it's early to make any major changes to Brazil. But we cannot forget just how poor the weather in Brazil has been for the past 2 months.

Brazil's rainy season is officially a month late, and absurdly dry to to the north. Planting has been delayed in several areas, so there is potential for a lot of acreage shifting.

Here is what some local Brazil producers had to say:

"The weather has been very challenging for this season in brazil. In Mato Grosso, the planting is delayed by the lack of rain, and in the south it is delayed by access. A lot of areas must be re-planted. The yields are already affected."

"The weather in Mato Grosso, Brazil is very dry with many sunny days ahead. Soybean planting is delayed. Difficult year to produce soybeans."

What's the current outlook? They added yet more rain to the south which is already drowning in rain. There is a few scattered showers up north, but totals for the next few weeks would only add up to 30% of normal at the most. Not ideal, at all.


Ahead of USDA reports, we do tend to see the funds and algos often times try to push prices closer to moving averages to mitigate risk from surprises in the report. Corn is currently below it's moving averages, beans are above. Not sure it will shake out this way with the Brazil forecasts, but perhaps we see corn slightly higher and beans slightly lower ahead of Thursday.

Tomorrow we will be going over some things we could see in the USDA report as well as preparing. So stay tuned for tomorrow’s update or audio.

Here is the estimates for Thursday's report.

Today's Main Takeaways

Corn

Corn attempts to make a new low yet again, but bulls were able to fight off new lows for the 2nd time in 3 days. As corn hovers just half a cent above it's $4.68 lows.

We said last week, there was a good chance we tested those lows or perhaps made new lows. We somehow haven’t broke $4.68 yet, perhaps this is a triple bottom? Guess we will have to see.

Short term, we are likely…….

The rest of this is subscriber-only. Please subscribe if you would like to receive full versions of our daily updates & audio.

Scroll to check out updates you would have received.

TRY 30 DAYS FREE

Try our stuff completely free. Get every exclusive update sent via text & email.

Sebastian Frost
Previous

GRAINS FIRM AHEAD OF USDA REPORT
Next

BEANS CONTINUE BULL RUN AS HARVEST WRAPS UP