Friendly Conab report followed by bearish WASDE
Overnight- Corn and soybeans futures traded weaker overnight as we digest these higher US carryouts. They did not reach yesterday’s lows so we will watch 429.75 and 1179.25.
Early morning yesterday, Conab released its fresh estimates for Brazilian production.
They lower their Brazilian soybean production estimate 6.2 MMT to 149.4 MMT & their total corn production by 3.9 MMT to 113.69 MMT.
These cuts were bigger than expected and took corn and soybean futures into positive territory before the morning pause.
Then the USDA released their February WASDE report later in the session.
USDA dropped soybean exports by 35 million bushels and corn F/S/I usage by 10 million bushels. They did not adjust any other categories which could have offset these reductions. Both soybean crush and ethanol could have been raised.
They left their Argentina numbers unchanged while they slow played Brazil’s soybean production only dropping soybeans by 1 MMT to 156 MMT. They were a little more aggressive with Brazil’s corn production dropping it 3 MMT to 124 MMT but they are over 10 MMT higher than Conab.
Post report trade was mostly mixed with a little sell off late in the session before a recovery that left corn down a penny and soybeans up 4.5 cents.
After we got the supportive Conab numbers, we thought there was a chance to get some upward momentum if the USDA report came out neutral to slightly friendly but that was not the case. We will see how today goes but the trade discounted the USDA’s Brazilian estimates. Look for more weakness early but likely buying going into the afternoon. NFC Grain Comments Options -new (1)