Corn is trading lower this morning following yesterday’s USDA report that showed growing US ending stocks and Brazilian corn production that was higher than expected.
The USDA said that corn ending stocks rose by 10 mb, but trade was looking for a slight decrease. They also pegged Brazil’s corn production at 124 mmt, far above CONAB’s guess of 114 mmt and above the average trade guess.
Following the El Nino weather pattern, a La Nina pattern is expected to develop in the second half of this year which could bring dry weather to North America.
The Argentinian corn crop was slightly damaged by the recent hot and dry spell, but upcoming rains are expected to reactivate the crop.
Soybeans are trading lower this morning after a bearish WASDE report yesterday. Both soybean meal and oil are trading lower and are in downward trends.
At this point, March and November soybeans are set to post a loss on the week, and funds were sellers of an estimated 1,000 contracts of soybeans yesterday. There has been little motivation for funds to stop selling grains.
Yesterday’s USDA report showed US ending stocks increasing by more than expected to 315 mb from 280 mb in January as a result of lower exports.
There is a large discrepancy between the USDA’s Brazil production estimate of 156 mmt and CONAB’s estimate of 149 mmt. World ending stocks rose slightly.
Wheat is mixed this morning with the Chicago contract slightly higher while KC and Minneapolis wheat are trading lower. Yesterday’s WASDE report was slightly bearish.
Yesterday, the USDA said that wheat ending stocks in the US were unchanged, but trade was expecting a lower number which caused a bearish reaction. World ending stocks fell slightly.
The Indian government announced that it would reduce the stock limits of wheat for traders and large chain retailers to avoid an artificial scarcity of wheat.
Non-commercials were estimated to have sold 6,000 contracts of wheat yesterday at a time where ending stock estimates are at their tightest levels since 2015.
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