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Traders Eye USDA Report on Tuesday

Traders will be focusing on the USDA report to be released on Tuesday

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Corn to the Sun

In the overnight session corn traded down 3/4 of a cent, soybeans jumped 1 3/4 cents and wheat fell 1 3/4 cents as we enter the morning pause. The dollar index is up 1/3rd of a percent this morning and crude oil is 14 cents higher this morning. Planting pace for corn is expected to have another big jump in this week’s crop progress report scheduled for release at 3 PM CST. Some traders are expecting corn plantings to be as much as 70 percent complete.

Traders will be watching the May supply and demand report due out on Tuesday at 11 AM CST. The average trade guess expects old crop wheat and corn stocks to increase since last month’s WASDE report. Wheat ending stocks are expected to climb to 693 million bushels from 684 million bushels in April. Corn ending stocks are also expected to climb to 1.864 billion bushels from 1.827 billion bushels last month. The average trade guess expects to see soybean ending stocks fall by 10 million bushels to 360 million bushels as strong weekly export sales force the USDA to revise demand numbers higher. The average trade guess pegs new crop ending stocks for wheat at 750 million bushels, corn at 1.752 billion bushels and soybean carryout at 443 million bushels.

Keep a close watch on South America production as both Argentina and Brazil has had better than expected harvests. The average analyst guess expects Argentina corn production to increase nearly 1 million metric tons to 24.95 MMT and soybean production to increase 1.5 MMT to 58.5 MMT. Brazil corn production is also expected to increase to 76.87 MMT from 75MMT in the April report. Brazil soybean production is expected to stay mostly unchanged at 94 MMT.

China cut its interest rates on Sunday for the third time in six months which should support soybean prices this morning as lower borrowing costs can have a positive impact on demand for imports. China’s economy continues feel economic pressure with analysts expecting annual growth to fall to 7 percent this year from 7.4 percent in 2014. More economic numbers will be released on Wednesday including industrial output and investment.

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