Corn is trading slightly higher this morning as prices consolidate ahead of the WASDE report which will be released at 11am central today.
Argentina’s corn crop is now estimated to be a record large 59 mmt which is 4 mmt above the last guess by the USDA and way higher than last season’s drought year.
On Wednesday, CONAB reduced estimated Brazilian corn production by 5 mmt to 117.6 mmt which is 11 mmt lower than the USDA’s last guess. It is likely that production is reduced in today’s report.
US corn exports are not expected to be adjusted in today’s report as they have been on track to meet USDA estimates, but exports are 37% higher than a year ago.
Soybeans are trading higher this morning ahead of what could be a friendly WASDE report. Prices remain rangebound for the week, and both soybean meal and oil are higher.
On Wednesday, CONAB cut their production estimates for Brazil to 155.3 mmt from 160.2 mmt, and the USDA’s last guess was 161 mmt. Many analysts see that number being even lower, closer to 150 mmt.
Where Brazil will likely lose production due to the hot and dry conditions, Argentina is set to produce more than double of last year’s crop due to good weather.
Weather forecasts for Argentina and most of Brazil are favorable with showers expected, but parts of western and central Brazil are expected to be dry over the next week.
All three wheat classes are trading higher this morning with Chicago wheat posting the largest gains. The March contract is in a bull pennant formation and more short covering by the funds could cause a breakout higher.
Temperatures in the Midwest are expected to fall below zero next week which could damage wheat that has not gotten a cover of snow.
In today’s report, traders will be watching wheat acreage closely, and they are expected to fall by about 800,000 acres or more to 35.8 million acres.
Last week’s export sales of wheat were low at just 4.7 mb for 23/24, but there are rumors that China is looking to purchase US wheat.
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