|
Since last Friday, March corn is up 2 cents, Jan soys are down 5 1/2 cents, and March wheat is down 5 cents. Momentum trading pulled us higher in regards to the WASDE report on Tuesday, but technical weakness flipped the narrative and sent us lower to close out the week. The trade will be looking for a fundamental story next week to set the tone.
The USDA will present the Trade with the “final” estimate for the US crop in 30 days. Often, yield and acreage surprises shift trade expectations. The changes of the last 8 years often defy the pattern in place in the market. This randomness in market revisions puts the market on the defensive going into the report.
This morning, USDA confirmed the sale of 200,000 tonnes of U.S. soybeans for delivery to unknown destinations in 2024/25.
Brazil will produce 169 mmt of soybeans this year according to USDA, up from 153 mmt the previous year (Conab is slightly lower). Some private estimates are as high as 173 mmt, based on current weather conditions as the crop heads into the final phases of the growing season. That would be a 20 mmt increase in production year-on-year, or 735 million bushel increase in one year, representing the bulk of what we're expected to export to China this year. Correspondingly, Brazil's real has been steadily weakening versus the dollar since 2011.China is a value buyer. Brazil's cheap currency means that its soybeans will be cheaper than U.S. soybeans shipped to China, if Brazil has soybeans available. Brazil's crop will start to come off at the end of January/Beginning of February. At this time, we usually see US soy exports drop off pretty significantly as the Brazilian supply ramps up... will we see the same with corn and wheat? ...Especially with the threat of late January tariffs on the table?
45Z remains the open-ended question it was the prior sessions.
Funds were thought to have been all sellers today. Corn was expected to have sold 4000 contracts (long 148,000), soybeans to have sold 4000 contracts (short 30,000), and wheat to have sold 3,000 (short 69,000).
| 
