RALLY AHEAD OF USDA REPORT

Written By Sebastian Frost

MARKET UPDATE & USDA PREVIEW

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Overview

Grains strong across the board, led by an impressive day in soybeans and a continuation rally in wheat ahead of tomorrow USDA WASDE report where we will get a look at if the USDA opts to change the Brazil crop or not.

The strength in wheat came from mostly short covering as they continue their rally and spook the funds. Trading higher for the 8th day in a row. The longest daily streak since April of 2022. Now +85 cents off their lows from last week.

Soybeans are higher on drier Brazil forecasts and some profit taking following the sell off. The next few weeks look awfully dry. Remember, December is the absolute critical key month for their production.

We have mentioned several times that November won’t be as important as December. But just look at how dry and wet the prime growing areas have been the past 30 days.

Areas to the north are some of the driest on record. This is also where the majority of their corn is grown, something to keep in mind as I do believe the corn situation will catch attention come January.

Areas to the South are some fo the wettest on record. Neither help out production.

How dry has Brazil been overall this year to compared to average?

Let's take a look at this map from climatologist Brian Brettschneider.

November was the 5th consecutive month where it was the driest of the last 50 years, while June was the 2nd driest.

So the second half of 2023 has been the driest on record.

Look at the bottom chart and you can see just how drastically different this year has been.

I simply think the Brazil crops are getting smaller. But is the USDA going to take that into consideration in tomorrow’s report?

The answer is…..

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In the rest of today’s update we go over things we could see in tomorrow’s USDA report. Effects each scenario could have. Our current recommendations for every situation. Our long term and short term outlooks for all of the grains & more.

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Sebastian Frost
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