LOWER LOWS & DROUGHT TALK

Written By Sebastian Frost

MARKET UPDATE

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Overview

Corn and beans both make new lows following yesterday’s friendly price action. Despite wheat being down hard early, it managed to rally back as yesterdays key reversal remains in place.

We were lower today due to technical and fund selling which stemmed from a lack of fresh news in the market for the bulls to chew on.

Weather in Brazil isn’t a problem, which can be a negative problem for grain prices. Soybean harvest and second crop corn planting both continue to move along at an above normal pace.

The weather in Argentina is also favorable right now, following their recent hot and dry temps which likely did a little damage. But the crop is still far better than last year, which isn’t hard to do.

It's still too early for US weather to have an impact, but it is starting to look like winter is coming to an end. We have had the warmest winter in 132 years and this warm weather looks to continue.

Take a look at how this winter shapes up with history. Warmest on record.

Now with this, yes this could lead to early planting because there will be little frozen ground and rain will absorb better.

However, on the flip side, the lack of snow is a negative factor for soil moisture.

Take a look at how dry this February has been. For the I-states, it's one of the driest on record.

Lack of soil moisture is already starting to show, the snow was supposed to help this.

Temps this month have been +20 to +30 degrees hotter than normal.

Take last year for example. We raised a great crop, but even so we still got that mid-summer weather scare that rallied us substantially in a matter of weeks.

Don’t tell me we won’t be getting at the very least a weather scare, whether the actual damage comes to fruition or not………..

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IN TODAYS UPDATE

  • US drought talk

  • Brazil 2016 vs today. Which is worse?

  • Risk management in corn & beans

  • Why do we continue to fall?

  • Why we will likely get a weather scare

  • What soybeans need to rally

  • Wheat market

  • Cattle recommendation. Highs in?

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Sebastian Frost
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