USDA report in the rear view mirror now. There were no surprises, but some important aspects. The yield was as expected, unchanged. Carry drops 5 million to 425. This is important that we stay above 400 million. The next question is will the US export figure remain 2250. The answer is determined by the south American crop. It is my belief that no it wont and will be adjusted down. This will push stocks to 475-500 million bu. This is also significant because we are growing the carryovers while we have a record demand growth. I really have little question with the rest of the domestic report. Although I would say, if meal prices break ? can the crush pace be sustained ? Looking at the global front. Brazil estimates on the rise to 108 ml tn Argentina left unchanged. Important because the weather has moderated and looks good. A large crop down there and a reduction of US exports puts the global Balance at 100 mln tns plus. The number today is 98 mln tons. A lot of product. I don’t know how hard we will break given the time of year. There is no reason to rally here unless South America throws a shoe in some manner.
Feed grains. Wheat numbers come in at a record globally. The domestic carry at 935. This trend on the domestic front will most likely continue.Actually the global front as well. The reality is the black sea region is producing a healthy amount of wheat and this will continue to expand. Corn well there is certainly no shortage of domestic corn. More significant additions today. The carry at 2487 is up almost 800 million bu from 2015/16 that is a issue. However the global picture may be a bit more friendly in the long haul. It is reasonable to expect a move away from corn where it is able to plant beans. The demand is robust. This should remain. A bit further down and I don’t want to press below 325 dec.
The markets are giving tech selling signals in the shorter term look. Lets see if this continues.