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Quiet Trading in the Overnight

Yesterdays USDA report showed little change in carryout numbers for grains.

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Grains were mildly weaker overnight in relatively quiet trade. In outside markets, the US dollar and S&P futures recovered some of their steep losses from Wednesday, while crude oil was slightly lower.

Yesterday’s USDA report showed little change in carryout numbers for grains, with the only meaningful change was an adjustment to the US corn balance sheet. USDA trimmed the annual export forecast by 50 MB and raised the ethanol use forecast by 25 mb, which netted a 25 MB increase in US stocks to 1,768 MB.

In weather news, South America growing conditions are nearly ideal for the crops there. The best rain potential for drier areas in Mato Grosso is likely the middle of next week and models have increased the potential for better rains in the 11 to 15 day. Stress remains limited to 10% of summer corn and nearly 20% of soy area (focused on northern Mato Grosso, Tocantins, Bahia, and points north). The improved shower potential in the 6-15 day outlook in central Mato Grosso and western Goias should help to prevent an expansion of the dry area in key soy areas. Active rains elsewhere support corn/soy growth, but frequent rains across southern Brazil in the next two weeks keep rust risks elevated for soy in 1/3 of the belt. Argentina saw rains favor northern Santa Fe and northern Entre Rios in the past 24 hours. Showers return late weekend favoring the northern 1/2 of corn/soy areas but a more extensive event covers most of the belt the latter half of next week ensuring favorable moisture for early development. The rains next week will slow wheat harvest in the northern areas but lodging damage should be isolated.


Actual Expected

Corn 1,095 450-650

Soybeans 1,453 700-1,100

Wheat 225 300-500

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

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