- We start the week with Chicago markets in corn, wheat and soybeans all now trading in positive territory. March ’17 soybeans pushed above $10.00/bu once again and whilst early rallies in the grains failed they have moved higher with an hour of trading to go. Expectations were for soybeans to ease with increased rain chances in N Brazil next week, but the trade seems to have other ideas. It seems that traders are happy to hold long positions into the USDA report later this week, although there is clearly still time for this to change.
- There are those who expect the report to be bearish for soybeans with record US yields and bullish for wheat with the second lowest acreage sown since 1900. One thing we have learned is that trying to predict USDA and CONAB reports is not a game for the faint of heart and is never a certainty.
- China is once again pricing soybeans in Chicago, their first venture in some weeks, and S America is also benefitting from their return to the market. Russian grain export data through to December is reported to be disappointing, and therein lies the possibility that they will become more aggressive in FOB pricing through the winter months.
- The trade is awaiting the Index Fund rebalance (buying) near the close in Chicago tonight. This rebuying could prop up the market heading the USDA report on Thursday. We would anticipate CONAB’s Tuesday morning report to reflect a Brazilian soybean crop of 101.5-103 million mt. This is still a choppy marketplace and we would stand aside until after Thursday’s report. Our market bias remains sideways as the “big crop” vs. “big demand’ scenario remains in place.