Markets are slightly higher to start the day with corn up 2 and soybeans up 3.
The USDA is releasing their crop report this morning. Many in the industry expect a drop in corn exports of 25-50 million bushels and a rise in soy exports with wheat unchanged. The crop size in Argentina will be the market mover today as drought during February has yield prospects dramatically reduced. The USDA has Argentina beans in February at 41 mmt with the trade estimating that the crop size will be reduced to 36.5 mmt. The corn crop in February was 47 mmt and trade is looking for a cut down to 43.5 mmt. Some private sources say the crop is closer to 27-30 mmt in beans and 35-39 mmt in corn.
The forecast models call for a lengthy period of hot/dry weather across Argentina as a high-pressure ridge has set up. Very little rain is offered, and only light showers are forecast in the south of Argentina. Scatter showers were seen in North Central Brazil overnight with totals of .2-1.25 inches. Temps will be normal for Brazil and above normal for Argentina over the next week.
The USDA is going to reduce crops today in Argentina and it’s just a matter of how much. They may not move on a reduction of corn exports yet as business can certainly move to the US in the coming months. Overall, I look for little response to todays report as the biggest report/news will come in a couple weeks when the USDA releases is March 31st Grain Stocks and planting intentions report.
Have a Safe Day!