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Prices Lower as Profit-Taking Weighs on Markets

Market expectations were missed for US corn stocks

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USDA Report Recap

  • Market expectations were missed for US corn stocks with USDA raising exports only 50 million bushels. That put US stocks at 1,502 million, which still is snug versus history.
  • USDA raised China’s corn imports to 24 MMT up from 17.5 million in January.
  • US soybean stocks were cut 20 million bushels to 120 million on higher exports but China’s imports were held at 100 million tonnes.
  • USDA boosted India’s and China’s domestic wheat usage, which cut back on massive global stocks. But no major changes were made to exporters.
  • USDA held Brazil+Argentina’s corn and soybean crops at the same levels in the January reports; the trade had expected marginally lower totals.
  • The 2020/21 upland cotton crop was left unchanged at 14.95 million bales while exports were increased to 15.50 million.
  • Projected US cotton ending stocks fell below expectations to 4.30 million bales from 4.60 million last month.

FBN’s Take On What It Means: USDA’s February numbers were not overall supportive, except to cotton, but we still expect upside across markets. The US and global corn balance sheets have room to tighten, especially for exporters. Soybeans also are facing tightening situations as the crop year progresses.

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Argentine Forecast Dry

  • Little to no rain was recorded over main corn and soybean regions in Argentina during the past week.
  • There was still enough soil moisture to maintain marginally favorable conditions, more rain is needed soon to reverse the drying trend.
  • The forecast calls for another week of little to no rain will persist from La Pampa and western fringes of Buenos Aires into Cordoba, Santa Fe.
  • Topsoil moisture in these areas will become short to very short by the end of next week, but subsoil moisture is expected to remain adequate to marginally short.
  • If the drier outlook verifies, the need for soaking rainfall in central Argentina will increase significantly after next week.

FBN’s Take On What It Means: The crop areas to experience notable crop stress in this first week of the forecast will be in La Pampa and western Buenos Aires. Additional drying in late February could lead to enough crop stress to raise some new concerns over production potentials.

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