• Chicago ag futures remain in correction mode at week’s end. The Dow is down another 750 points, firmly position in correction territory, while spot WTI crude is down $2.50/barrel at $44.60, the lowest price since December 2018. The cascading effects of weak energy weighing on exporter currencies continues. And there is still no bullish offsetting news available. The only decent performer has been soymeal, which has found support from a record fund short position and uncertainty over future Argentine exports.

• The Brazilian Real has fallen to 4.48: 1 US$. The Argentine Peso has found a new all-time low at 62:1 US$. Russia’s Ruble has fallen to a 13-month low. Brazil’s daily corn price index has rallied to Real 53/bag, vs. Real 42/bag a year ago.

• The CFTC’s commitment of traders report this afternoon is expected to feature rising net fund short positions in corn and beans and a net long in Chicago of 42,000 contracts, vs. 65,000 the previous week.

• It is estimated that as of midday today, managed money is short a net 146,000 contracts of corn and a net 90,000 contracts of beans. Funds’ net length in wheat has been trimmed to just 22,000 contracts. Yet, it is likely that the funds’ long in Chicago wheat is eliminated entirely without adverse weather in the next 30 days.

• We caution against turning bearish of corn and soy amid expanding fund short positions. But the spread of the coronavirus, which has proved difficult to contain, coincides with negative seasonal trends as the S American harvest looms.

• The Buenos Aires Grain Exchange on Thursday raised its Argentine corn production estimate to 50 million mt, vs. 49 million previously. Soybean production was raised to 54.5 million mt, vs. 53.1 million previously. Report suggest that soy yields in far Northern Brazil are exceeding prior records by a wide margin.

• The EU weather model this morning maintains widespread soaking rainfall of 1-4″ across the whole of New South Wales and Australia next Wed-Fri. Should the forecast verify, longer term drought there will be eliminated. The message is that, coronavirus aside, the markets needs a supply-based spark to sustain rally efforts. Such a supply spark is unlikely to be available until US seeding begins in earnest in mid/late April.

• The midday GFS weather forecast is slightly wetter in Central Argentina in mid-March but is otherwise unchanged from prior runs. The dominant theme over the next 10 days is that near daily showers will continue across Central and Northern Brazil while dryness persists across Argentina, Paraguay and Southern Brazil. We would mention that model guidance has been consistent in offering better rain chances to key areas of Argentina March 9-13. It is also likely that Brazilian rainfall expands into Mato Grosso do Sul and Sao Paulo beyond the next 10 days. The outlook is broadly favourable. Brazil’s soy harvest will be accelerating.

• A bottom will be found once the market has confidence that normality returns to financial markets. Daily action will be driven by whether confirmed coronavirus cases rise or fall. This is no place to make sales.

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Weekend summary 28 February 2020

• Ag futures are mixed, with grains down sharply and soybeans steady. It is more of the same in Chicago and elsewhere as focus sits squarely on the spread of coronavirus. The virus’s spread into Latin America and Europe will make containment all the more difficult, while discretionary spending will on the margin be trimmed until the disease is controlled. Recall the 2020 summer Olympics are due to take place in Tokyo in July. It is premature to forecast the duration of coronavirus, but summer travel will be hit hard should it continue.

• The US equity market has entered correction territory. Spot crude oil is down $1.25/barrel with gasoline and ethanol prices following.

• There has also been a real lack of bullish fundamental input. Argentina’s corn harvest will begin in earnest in the weeks ahead. More of the trade is beginning to digest recent and upcoming rainfall in both Western and Eastern Australia, where a years-long drought will be eliminated amid normal March precipitation.

• Russian wheat prices have been moving lower as farmers in the South become more active in selling remaining old crop bushels. The Ruble at midday is sharply weaker as crude’s decline is extended. This will only add to selling incentive in the Black Sea.

• US export sales through the week ending Feb 20 featured decent interest in US corn but uninspiring interest in wheat and soybeans.

• Corn sales through the period totalled 34 million bu. This compares to 49 million the previous week but is well above the 26 million bu average needed to meet the USDA’s target. Another 1-2 weeks of sales in excess of 30 million bu is expected before global demand shifts to the Southern Hemisphere. Wheat sales were 14 million bu, vs. 13 million the prior week. Soybean sales totalled 12 million bu, vs. 18 million the prior week and vs. 24 million in late Jan/early Feb. Increasingly the USDA’s 2019/20 US soybean export forecast appears much too high. China last week secured just 72,000 mt of US beans. Soy oil sales totalled just 5,600 mt, vs. 29-53,000 in Jan and early Feb.

• We would mention that China was confirmed to have bought 119,000 mt of US sorghum, with another 324,000 mt of sorghum sold to unknown destinations. Chinese interest in US crop markets is otherwise absent. The GFS weather forecast has shifted soaking rain next week south. MO, IL and IN will be spared. Lasting, and needed, Midwest dryness is probable into mid-March.

• In S America, the midday GFS forecast is drier in Argentina in the 11-15 day period. The GFS keeps the current pattern stagnant into the middle of next month. Near daily showers will be ongoing across Mato Grosso, Goias, Minas Gerais and far Northern Brazil. Very little rain is forecast elsewhere in S America over the next 10 days. Argentine temperatures are forecast to rise as soil moisture erodes, with high temperatures projected in the low 90s. A majority of corn in Argentina has passed through pollination, but later planted crops will be in need one 1-2 more rain events in the next 30 days.

• Fund length in Chicago wheat looks to be eliminated, while global GDP growth uncertainty will make lasting rallies very laboured in the weeks ahead. We would advise against selling into this correction, but the next potential ag markets spark is likely the release of NASS’s stocks and seedings data in late March.

• Chicago ag futures are steady to slightly higher at midday on a short covering bounce. The US DOW is breaking on expansion of the coronavirus infections across the world with investors seeking safe harbour. The DOW was down over 400 points at midmorning, producing the largest 4-day correction since August.

• After rallying strongly since 2009, a long-needed equity correction appears to be unfolding as traders understand that dropping US/world interest rates will not boost demand until a coronavirus treatment or vaccine is available.

• Following Monday’s sharp decline, Chicago is attempting to catch its breath, but it is doubtful that any lasting rally can unfold without adverse weather.

• We look for a mixed to lower Chicago close with a weekly trading pattern of declining early and late week with a bounce in price in the middle. End users are now getting forward coverage well into mid-summer.

• Chicago brokers estimate that funds have bought 2,000 contracts of wheat, 1,900 contracts of soymeal and 1,200 contracts of soybeans. Funds have sold 4,700 contracts of corn and 2,200 contracts of soymeal.

• There are rumours that China is asking for March Brazilian soybean cargoes to be delayed due to supply chain disruptions and slowing feed demand. We cannot confirm how many cargoes that China crushers are asking to be delayed (holiday), but we do not foresee that China is wanting to shift any of that demand to the US. China has secured a record number of Brazilian soy cargoes through May, but until there is clarity on the coronavirus’s economic in China, the future purchase pace is likely to slow.

• US interest rates (30-year bond) are perched at record lows with the rate falling to just 1.8%. The 10-year note has fallen to 1.3% with the spread between the two just 0.5%. The US interest rate market argues that its concern for a slowing US and world economic outlook is ongoing.

• Brazil has started to offer new crop corn for export in July at 54 cents over July Chicago corn futures. This compares to US Gulf offers of 59 cents over. Argentine fob corn is still the cheapest in the world from April forward by $6/mt or 15 cents/bu. The window for US corn exports is closing. US corn exports through February 20 are down 462 million bu while export commitments are down 524 million bu at 984 million. US 2019/20 US corn exports are forecast by WASDE at 1,675 million bu, which is likely too high by 50-125 million bu.

• China is expected to start taking offers for duty exempt ag import licenses on March 2. No-one seems to know when actual licenses will be issued, but unlike last week, the tyre kicking by Chinese importers for US ag goods has slowed.

• The midday GFS weather forecast is wet across N Brazil while a dry pattern holds across Argentina for the next 10 days. No heat is expected for S Brazil and Argentina with the 11-15 day period keeping Brazil well-watered while Argentina stays arid. The overall S American weather pattern appears to be stuck. Argentina needs several finishing rains with the soybean and second corn crop in reproduction.

• The livestock markets are not flashing a bottom with fresh losses today. It is hard to be bullish of an ag commodity amid the fear of declining global GDP (demand) due to coronavirus. The price pattern in the “virus markets” is to rally during the midweek (short covering) with selling (risk off) during the early and late week.

• Corn, soybean and wheat futures are trying to bounce midweek as soybeans have been able to hold their January low.

• Funds are still holding a large net long of 38,000 contracts in Chicago wheat with world cash fob offers softening. Russia and Brazil are likely to return following the Carnival holiday with new cash selling.

• Chicago ag futures are sharply lower with wheat and soybeans pacing the decline on the expanding coronavirus pandemic fears. Chicago wheat has fallen below its 50 and100 day moving averages (and January lows) which has sparked wholesale fund liquidation. Funds are long a record amount of Chicago wheat and they are selling on the seasonal weakness in world FOB values.

• Soybeans have fallen back to their late January lows at $8.6875 while March corn has dipped below its January lows at $3.7075. A sharply lower Chicago grain close today is likely to spur additional long liquidation on Tuesday.

• The US DOW has fallen to losses of 1,000 points with the 30-year bond rate falling to a record low of 1.8%. The worry is that world economic growth will be severely crimped by expanding coronavirus infections.

• The decline in asset prices has become emotional this morning as traders/investors try to understand the expanding world coronavirus risk profile. Fund managers report that it’s “risk off” because they cannot measure the economic impact of coronavirus. Ag traders understand that the expanding coronavirus will disrupt supply chains and world demand. The market understands that Covd-19 is not SARs or MERs, but a virulent cousin that is now expected to be disruptive of world economic growth for weeks/months to come. SARs never exploded in world incidence like this coronavirus. Containment will be key going forward.

• US livestock prices will be the “canary in terms of measuring world food demand and economic activity. One should not consider buying corn, soybeans or wheat until a bottom is confirmed in US livestock futures. April cattle futures are limit down with pork futures sharply lower this morning. US meats have a much more bullish outlook amid China’s demand for foodstuffs once coronavirus worries subside.

• US export inspections for the week ending February 20 were; 35.9 million bu of corn, 21.8 million bu of soybeans and 15.1 million bu wheat. Total US grain exports were 73.5 million bu compared to 90.0 million last week and 107.3 million last year.

• For their respective crop years to date, the US has exported 520 million bu of corn (down 462 million or 47%), 1,016 million bu of soybeans (up 138 million or 15%) and 666 million bu of wheat (up 59 million or 9.7%). China shipped out just 5.0 million bu last week, a total that its likely to decline further in the weeks ahead.

• The US$ has stabilised following the morning surge. Much of the world is on Carnival holiday ahead of Ash Wednesday. It is expected that the Brazilian Real will open at a new all-time low of $4.40-4.50 vs the US$ later this week. The Russian Ruble is back to 65.5:1 which is spurring Russian cash wheat selling from the producer. The world farmer will sell into the Chicago decline based on the fall in their local currency (and rise in domestic cash bids).

The midday GFS weather forecast has added to Brazilian precipitation totals while a dry pattern holds across Argentina for the next 10 days. No heat is expected for S Brazil and Argentina, with the 12-15 day period offering a modest rain chance. It will be important that some rain returns to Argentina in the 11-15 day period.

It is hard to be long of any ag commodity amid the fear of declining GDP rates (demand) due to the global spread of coronavirus. There will be periods of short covering, but new buying demands virus containment. Chicago wheat has a record net long fund position that is in liquidation. Watch to make sure the S&P holds its January low at 3,183 (monthly reversal).

• Chicago ag futures have weakened at midday as energy and equity markets drift lower into the weekend. USDA Outlook Forum data in the last 24 hours has failed to provide much insight. It is back to waiting on confirmation of Chinese demand for ag goods, monitoring S American combine reports and tracking the spread of coronavirus. Limited activity is expected into close. We would reiterate that Outlook Forum balance sheets were bullish soy, bearish corn and neutral wheat. But it is Northern Hemisphere weather that will dominate price determination in the months ahead.

• US export sales through the week ending Feb 13 featured a slowing of wheat and soy demand, but solid corn demand amid competitive US prices. Weekly corn sales totalled 49 million bu, vs. 38 million the prior week. Japan emerged as a sizeable buyer, purchasing 20 million bu. Wheat sales were 13 million bu, vs. 24 million the prior week. World trade is seasonally slowing. Final US wheat exports in 2019/20 will be fine-tuned based on official Census exports moving forward. Soybean sales totalled 18 million bu, vs. 24 million the previous week. Soy oil sales were a solid 42,000 tons. The USDA’s annual US soy oil forecast of 1,900 million lbs increasingly appears 100-150 million lbs too low.

• We note it was this week a year ago that the USDA updated its 2018/19 commitments following last year’s lengthy government shut down. This week’s report provides a more accurate a picture of sales compared to last year. Corn sales to date sit at 985 million bu, down 35% from last year. Total wheat commitments are 818 million bu, up 4% on last year. Total soy commitments are 1,229 million bu, down 9% from this week a year ago. China remains active in securing new crop Brazilian beans for spring arrival.

• There also appears to be a noticeable slowdown in world corn and wheat trade through the first half of February, the message being that Chicago ag futures need a structural demand driver to sustain rallies.

• This afternoon’s CFTC report is expected to show that managed funds are short at net 63,000 contracts, vs. 72,000 the prior week. Managed funds are also estimated to be short a net 72,000 contracts of soy, vs. 92,000 the prior week. Fund are long an estimated 58,000 contracts of Chicago wheat.

• The midday GFS weather forecast has again added to Brazilian precipitation totals through the next two weeks. A pattern of stagnant heavy rainfall is forecast, with cumulative totals upward of 5-8″ due across Mato Grosso, Goias and Minas Gerais. The pace of Brazilian soy harvesting and safrinha seeding so far have matched longer term averages, but delays will mount if the GFS forecast verifies. We would mention that the EU and Canadian models have kept soaking rainfall in Brazil more scattered. The GFS forecast is likely overdone, but the solution cannot be dismissed outright. Dry but cool weather will persist in Argentina into early March.

• The ongoing spread of coronavirus continues to provide headwinds to global financial markets, with the Dow down 200 points and spot crude down $0.5O/barrel. It likely takes a warming of Northern Hemisphere temperatures before calm settles in. Our longer-term message remains that weather issues are needed to trigger lasting elevated prices.

• Chicago ag futures are again slightly weaker at midday. The release of the USDA’s 2020 US seedings forecasts have come again without much fanfare, and so the market is back to watching S America and awaiting clarity over potential Chinese demand in the weeks and months ahead. Wheat continues to lead breaks as global trade slows seasonally.

• USDA pegged 2020 corn acreage at 94.0 million, slightly above the trade’s guess but down 500,000 acres from the previously released baseline estimate. US soy seedings are projected at 85 million, up a full million from the baseline release. New crop all-wheat seedings were put at 45 million acres, on par with the baseline forecast. Large US soy/corn crops will be harvested this autumn with normal weather.

• However, equally important is that USDA Secretary Sonny Perdue stated that another round of MFP aid should not be expected. As such, US row crop margins are expected to decline in 2020. Marketing crop and taking advantage of supply, and Chinese demand-based rallies is imperative this spring and summer. Weather in Central Brazil will be monitored closely over the next 60 days but widespread drought remains unlikely there.

• Ag Sec Perdue also was unable to provide a timeline for elevated Chinese purchases, but expects China to comply with its Phase One commitment. Purchases are expected once the impact of coronavirus in East Asia subsides.

• US ethanol production through the week ending Feb 14 totalled 306 million gallons, up 2 million on the prior week and up 13 million on the same week in 2019. Yet, amid weak blend and export demand growth, weekly US ethanol stocks last week were 1,040 million gallons, a new all-time record. Chicago ethanol futures are down $.02/gallon at midday. Futures-based production margins are signalling the need for a brief slowdown in weekly grind.

• EU wheat futures are flat amid further weakness in the €uro. Fob premium and interior wheat basis in Europe remain elevated, but the global wheat market is increasingly looking towards new crop weather for direction. It remains tough find a major problem, with additional soil moisture boosts due in Europe and Southern Russia. Queensland and much of New South Wales in E Australia will see additional rainfall of 0.50-3.00″ in the next 7 days.

• This leaves North Africa as the only problem spot. It is probable that N African wheat imports in 2020 rise 1.0-1.2 million mt to a a near record 28.4-28.6 million mt without a shift to wetter weather in March.

• The midday GFS weather release is wetter in Northern Brazil into March 2, but the overall pattern is consistent with prior runs. S American rainfall in the next 10 days will be funnelled across Central and Northern Brazil while an arid but cool pattern stays intact across Argentina. The GFS forecast now advertises cumulative totals across Mato Grosso and Goias of 4-7″. This is likely overdone but regional delays in harvesting and safrinha corn seeding are probable. Soil moisture will not be an issue for Central Brazil into mid-spring.

• The market lacks the boost it needs from Chinese demand to rally. Yet, amid a wet spring US climate forecast, a more bearish pattern will not emerge until a normal seeding pace is confirmed.

• Chicago ag futures are lower at midday. Corn, soybeans and wheat futures are lower amid the ongoing rise in the value of the US$ and fund profit taking in wheat. Corn/soybean futures are following wheat’s loss in sympathy. No trader wants to press grain futures too hard ahead of the Outlook Forum that starts Thursday morning. Look for the early break to be supported.

• Chicago brokers estimate that funds have sold 4,200 contracts of wheat, 5,100 contracts of corn and 1,800 contracts of soybeans. In soy products, funds have sold 3,500 contracts of soyoil and bought 700 contracts of soymeal. March corn futures have been hanging a few cents either side of $3.80 and traders are hoping for a breakout one way or the other to fuel a trend.

• The Brazilian Real scored a record low against the US$ at 4.38:1. The Brazilian Government shows limited willingness to intervene to support the Real. The Argentine Peso is trading just under 62:1 and is also likely to score a new low also. The US$ is resting just below 100.00 on the index with a close about this resistance level projecting a further rally to 104.00.

• China is reported to be showing new interest in US sorghum, DDGs, Hi Pro wheat, ethanol and US meat. We can not confirm any new sales, but it appears that “tyre kicking” is starting with China to take tariff exemption license applications on Monday March 2. Chinese importers are willing to get ahead of the Government issuance and start purchasing US ag goods with the expectation that a duty-free import license will be issued in March. US new crop soybeans are competitive against S American fob offers beginning in the LH of July.

• Brazilian vessel loading wait times are normal for late February. We see no evidence that the wait to berth a vessel is any different from last year. We are not aware of any Brazilian soybean sales that are being transferred to the US. Rumours of such transfers are unfounded.

• Brazilian farmers are making sales on 2021 crops amid the fat margins on soybean/corn production produced by the weak Real. Economists argue that the Real could drop to 4.50-4.60 before a final low is established. Brazilian corn/soybean production is likely to rise further in 2021, weather permitting.

• The midday GFS weather forecast is wetter for much of NC Brazil while being dry for Argentina for the next 10 days. The forecast has virtually no rain for Argentina while totals for NC Brazil will reach 4-7.00″ The Brazilian rains could produce harvest/winter corn seeding delays. The midday forecast is more concerning for a smooth Brazilian harvest with cutting in full swing. Our bet is that the midday GFS is too wet for NC Brazil.

• Funds are too short of soybeans with China potentially to start securing new crop US soybeans in March. The headline that China is booking US ag commodities opens the shorts to upside Chicago price risk. We maintain a market stance that the world is oversupplied with grain, but a China purchase would create a short-term bounce. Amid strong US cash basis bids, look for a modest recovery into March.

• Chicago ag futures are mixed at midday with the grains leading the rally. Wheat rallied strongly on renewed fund buying with corn futures tagging along.

• Traders are pointing to the Australian wheat crop size cut along with the potential for China demand for US wheat as a rationale for the rally. The UN also put out a note on the weekend that locusts from Africa could impact crops in SE Asia. Bloomberg carried the story which likely added to fund buying.

• Chicago soybean futures are weaker with the Brazilian Real rising against last week’s historic high at 4.36:1. The Argentine Peso has pushed out to 62:1. The strength of the US$ has acted to cap Chicago soybean futures amid the Brazilian soy harvest kicking into a higher gear. We estimate that 45% of the Mato Grosso soybean harvest is completed with winter corn being actively seeded.

• We look for a mixed close with traders trying to decipher what tariff rate China will allow US ag imports to which importers. Chinese importers will want to get ahead of the March 2 start for accepting applications and make cash purchases. China will be looking to book July forward US soybeans and US meats in the initial tenders. US corn is the cheapest in the world for another 6 weeks, but that discount is narrowing against cheap Argentine offers.

• Chicago brokers estimate that funds have bought 3,900 contracts of Chicago wheat and 4,300 contracts of corn, while selling 2,300 contracts of soybeans. In soy products, funds have sold 900 contracts of soymeal and bought 1,200 soyoil.

• US export inspections for the week ending February 14 were 31.3 million bu of corn, 36.5 million bu of soybeans, and 18.4 million bu of wheat. China shipped out 7.4 million bu of US soybeans off the PNW.

• For their respective crop years to date, the US has exported 484 million bu of corn (down 468 million or 49%), 1,038 million bu of soybeans (up 164 million or 19%), and 651 million bu of wheat (up 73 million or 13%).

• US 2019/20 corn exports are still likely overstated by 75-100 million bu based on research.

• Locusts are a problem in NE Africa, but whether the insects can manage to migrate into India/Pakistan and across the Himalayas into China is possible, but doubtful. North African dryness is likely to raise wheat/grain import potential in 2020/21. Rains are needed which is more important than locusts.

• NOPA reported a record large January soybean crush rate of 176.9 million bu with soyoil stocks rising to a much larger than expected 2,013 million pounds. The report was bearish for soyoil, but supportive for soybeans.

• The midday GFS weather forecast has added rain for Brazil while being drier for Argentina. Above normal rain looks to drop across Central and Northern Brazil which will cause harvest delays but maintain favourable soil moisture for winter corn. The 10-day forecast for Argentina is arid, but cool. Amid the rain that fell on the weekend, the outlook for Argentine crops is favourable (for now). Finishing rains will be required in early and mid-March. No heat is noted for S America for the next two weeks.

• The hope for actual China demand for US ag goods is rising with the Chinese commitment to lower duties and issue import licenses starting in 13 days (Mar 2). We expect that China will make US ag purchases in early March as a show of good faith in their commitment to adhere to Phase One. When a China ag purchase is made, it will resonate across all US markets that a wave of new demand is pending.

• Chicago ag futures are mixed at midday with the summer row crops being weaker while the wheat market has been firm. The volume of trade has been modest, and few traders want to take on any risk heading into a long US weekend. We look for a mixed close with corn sagging on talk that China has secured another 500,000 mt of Ukraine corn. World grain values keep slipping which is not bullish for Chicago. The best chance for any Chicago rally rests on the shoulders of China under the Phase One agreement. Otherwise, the world is awash with grain with S American export offers to become more aggressive.

• Chicago brokers estimate that funds have sold 3,000 corn and 2,300 contracts of soybeans, while buying 1,900 contracts of Chicago wheat. In soy products, funds have sold 2,400 contracts of soymeal while being flat in soyoil. Funds bought 1,900 contracts of soyoil early and sold most of it back out.

• Cash traders report that China has booked another 500,000 mt of Ukraine corn in the past few days. China was rumoured to be seeking Ukraine corn last week which is being added in the 500,000 mt total. All combined, China in the crop year to date has booked an estimated 1.8 million mt of Ukraine corn, which we assume is under TRQ import licenses. The surprise has been that even as China has taken the Ukraine corn, fob export offers continue to decline with March ending slightly below $180/mt.

• Russian fob wheat prices continue to weaken with fob offers at $220/mt for March. The Russian fob wheat market peaked at $230-232/mt in January and has been softening ever since. And the market has taken out back month premiums in fob offers so a nearly flat market structure exists. The spread between French and Russian fob wheat is now only $5/mt Russian premium. We expect that the narrowing spread is going to send additional demand to Russian wheat in coming weeks.

• China placed a priority on medical and foodstuff vessel offloading compared to soybeans, corn or wheat. It is meats/vegoils that China demands nearby amid its worsening coronavirus outbreak. Food imports will take precedence in coming months. This has produced selling in the Chicago grain/soybean markets.

• USDA’s updated Baseline Report showed 2020 US corn seeding at 94.5 million acres, soybeans at 84.0 million, and US all wheat seedings at 45.0 million. USDA forecast 2020/21 US corn end stocks at a hefty 2,754 million bu, US soybean end stocks at 518 million bu with US 2020/12 wheat at 950 million bu. Assuming US corn trend yield of 178.5 bushels/acre in corn and 50.5 bushels/acre in soybeans, US 2020/21 farmgate prices average $3.40 for corn, $8.85 for soybeans and $4.80/bu for wheat. There surely was no bullishness in the updated USDA Baseline, even with the US/China Trade Deal.

• The midday GFS weather forecast is close to the overnight forecast solution for the next 10-days. Above normal rain looks to drop across Central and Northern Brazil which will cause some harvest delays but maintain favourable soil moisture for winter corn. Rain returns to Argentina next Monday-Tuesday. S American crop potential is likely to be record large.

• The only way that Chicago will rally is with actual China demand. Otherwise, record large S American crop harvests and the return of 19 million plus US Prevent Plant acres into production sends a rather bleak long-term outlook. Firm Midwest cash basis bids offers support on breaks.