TURNAROUND TUESDAY
Overview
Turn around Tuesday today as we got the exact opposite price action as yesterday. Yesterday beans rallied +30 cents while the wheat market sold off over -20 cents. Today beans were lower while wheat rallied. Corn has been following the wheat market, although the moves are far less drastic, trading in roughly a 5 cent range rather than a 20 cent range.
One thing to note on the last two days of action. Wheat took back nearly all of yesterdays losses, while soybeans only gave back roughly 1/3 of yesterdays rally.
Why the price action?
A simple explanation today is that the funds are simply reversing their positions from yesterday. They are trying to decide what to and if they want to cover shorts before the end of the year or not.
Yesterday the strength in beans was Brazil worries while the weakness in wheat was profit taking following the +80 cent rally the past week or so.
The main focus is still Brazil. So let's start there.
Overall, still hot and dry. They put some rains in the 10 day forecast which pressured us today, but nothing to really change the trend or pattern. Rains disappeared last weekend and the forecasts continue to turn hotter and drier.
The GFS model continues to show heat with many areas showing 100+ degrees towards the end of this week.
Now here is the current outlooks.
247 Ag pointed this next part out. The first map is one from a while ago. The second one from a week ago. Now this.
Just goes to show that these forecasts are constantly changing, and usually trending drier.
This next chart is from Karen Braun. It shows what the monthly precipitation would look like for Brazil using today's GFS rainfall forecast for December.
Most agree, this won’t be enough rain if true. That's IF the forecasts are accurate. Often times lately they have been over exaggerating rain.
Brazil Consultant, Kory Melby:
"Tough week ahead for MT. Rain comes December 21 or so, but the below normal November and December totals will catch up with this crop. Too hot for good bacteria and en the end hits the yield. Lots of empty pods in early soy."
Brazil Farmer, Romeu Gusatti Filho:
"The lack of rain and high temps is causing huge damage. This soybeans field received good volumes of rain until the beginning of December. In the reproductive period the need of water increases a a lot and the damage is irreversible."
Brazil Consultant Estimates
Here are some estimates from a consultant in Brazil.
These are very very bullish numbers if even close to true……
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In the rest of today’s update we go over some estimates from Brazil sources, is the USDA telling us the whole story? We go over why the Brazil corn situation could be a major wild card. Managing your risk in all the markets. Exact strategies for every situation. How high can soybeans go and much more..
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Check Out Past Updates
12/11/23
IS THE WHEAT PARTY OVER & BEANS JUST STARTING?
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12/8/23
GARBAGE REPORT AS EXPECTED & CHINA STOCK PILES GRAIN
12/7/23
RALLY AHEAD OF USDA REPORT
12/6/23
RISKS, FACTORS, & WHAT TO WATCH
12/5/23
WHEAT CONTINUES RALLY & BEANS BOUNCE BACK
12/4/23
IF CHINA IS BUYING, I’M NOT SELLING
12/1/23
BRAZIL, CHINA, FUNDS & SEASONALS
11/30/23