Markets are firm this morning with corn up 11 and soybeans up 32 to start the day.
In the USDA report yesterday, they left US corn carryout the same, dropped beans by 25 million, and added 20 million to wheat. In South America they dropped the Argentina corn crop 1.9 mmt to 52.1, dropped soybeans 2 mmt to 44.5. Brazil corn was cut by 1.4 mmt to 113.6 and beans were cut 5.3 mmt to 133.7 mmt. They reduced production and again took the more middle of the road approach. Those cuts in Argentina are very slight, as is the reduction of Brazilian corn. Conab released their soybean and corn crop estimates, and they were down sharply in soybeans, 15 mmt lower to 125.6 mmt. The corn estimate was 112.3 down from 112.9.
The Biden administration is considering a new China tariff probe if current talks fail to persuade Beijing to follow through on its promised purchases of U.S. goods, energy and services, officials from the largest U.S. business lobbying group said on Wednesday. China met less than 60% of its purchasing goal, failing to make good on its promise to increase U.S. purchases by $200 billion above 2017 levels during 2020 and 2021 – a two-year period disrupted by the COVID-19 pandemic and supply chain bottlenecks.
We are still in the process of creating a top in beans. The corn market acts like it has gone far enough and will probably struggle at some point to move higher. There will be a reversal at some point in this market, could it be today or tomorrow? Prices are very high and you’d be crazy not to add sales on the rally, especially as it matches up with the insurance price now. Something always changes, we just never know what that new input will be.
Have a Safe Day!