Jan 11, 2022

Two-sided price action with similar range on either side of unchanged as trade positions itself one day ahead of the monthly WASDE and quarterly grain stocks reports.  Old crop contract months finished the day higher with new crop settling lower in soybeans and corn saw mostly fractional gains to close Tuesday.  CONAB (Brazil's version of the USDA) released their updated production forecasts this morning, cutting the corn production forecast 4.28 million tonnes to 112.9 million tonnes total.  Based solely on first crop yield loss.  Brazil soybean production was lowered only 2.29 million tonnes to 140.5 mln tonnes (still a record).  The USDA is expected to report a larger production number than CONAB for Brazil soybean production.  The USDA made a sale announcement at 8am this morning of 100,000 tonnes (3.6 million bushels) to Mexico for the 2021/22 marketing year.  In tomorrow's WASDE report, estimates expect the USDA make the cut in U.S. corn ending stocks that that trade was looking for in December, from 1.493 bln bu. to 1.472 bln bu.  US soybean ending stocks are estimated to increase 8 million bushels to 348 mln bu.  For the quarterly grain stocks report, analysts estimate corn stocks at a 3 year high of 11.6 billion bushels and soybeans stocks to increase 6% from December 2020 to 3.129 billion bushels.  No matter what magic the USDA uses to change any figures, the most important line is the estimated ending stocks for corn and soybeans.  When all is said and done, we simply trade a number reflective of our ending inventories.

Corn traded a relatively tight range today, finding support at the 20-day moving average of 599’1.

Soybeans had some small gains on the front end after trading around 24 cents on the day, giving anyone bullish or bearish a great opportunity to position themselves ahead of tomorrow’s report.

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