Yesterday’s report did nothing to hurt the market, but also nothing to support it either. The report was the usual February changes that had been expected by the market. Cutting exports in corn made sense and further cuts will be coming unless China is going to make up the difference. Some of the US exports can be back loaded, so cutting back the entire pace lost could be premature. Corn exports are expected to expand next year and be back closer to the 2017/2018 levels. The USDA raised ethanol by 50 million bushels, which kept the carry out for corn the same.
Soybeans saw an increase in exports of 50 million bushels as we are ahead of pace and China will be seeking more beans in the future. Ending stocks for soybeans were 425 million bushels. The big challenge will be competing with Brazil’s biggest crop that keeps getting bigger and its currency which is at record lows versus the dollar. Brazilian beans were increased to 125 mmt. This is a 7 mmt increase from last year.
South American weather forecast are drier today, but still have some rain coming. Argentina will see regular rain in the coming days, helping soybeans pod. The key right now is that no extreme heat is forecasted.
Have a Safe Day!