Overnight corn was down 1, soybeans up 1 and wheat down 1.
Corn and soybeans have done a lot of trading to the downside to start the year and yesterday was just another one of those days. The fact that we bounced and closed off yesterday’s lows is a sign that we may not go continue straight down with some big data due out on Friday. The USDA is hard to predict but the fact that we have both the WASDE and stocks report out on Friday only adds uncertainty. Personally, I don’t think we have much more risk of the downside in the short term. We could see a dip on Friday if the numbers are surprising, but I believe it would only be a one-day trade. Until we have more certainty around the Brazilian production, 4.50 CH should be a good support level.
There are rumours of China cancelling soybean purchases out of the US this week, which doesn’t come as a great surprise. Speculation is that they are cancelling due to having more certainty around the Brazilian supplies given the latest rains and forecasts for South America.
Brazil’s weather continues to perform in a helpful manner. Rain is plentiful as systems rotate through the belt the next 15 days. The 1st crop is just at its advent of harvest with 2% of the crop taken up. Even as some of the 1st crop corn is ready, 7% of the 1st crop remains unplanted which shows the spectrum that defines Brazil’s production cycle.
Have a Safe Day!