What Traders are Talking About:
* Argy rain event in question. What once looked to be a promising rain event for Argentina's main grain production areas early next week now appears like it will turn out to be little more than scattered, light rains with minimal benefit to crops. There is, however, the "chance" for better precip late next week. Meanwhile, southern Brazil is expected to get more precip over the weekend and early next week after receiving rains this week. That should benefit crops there. Central Brazil will also remain wet, which will continue to impede harvest efforts and reduce crop quality in the wettest areas.
The long and short of it: Rain events in Argentina continue to disappoint. As a result, forecasters are cautious about the rains currently forecast for late next week.
* Upbeat Chinese economic data. China released trade and inflation data prior to the country's Lunar New Year celebration, which will shutter markets there next week. On the trade front, China's trade surplus narrowed modestly in January to $29.2 billion from $31.6 billion in December, but that easily bested expectations. Exports were up 25%, while imports rose 28.8%. China imported 4.78 MMT of soybeans in January, which was down 18.8% from December, but 3.8% higher than January 2012. Meanwhile, inflation eased in January after rising more than anticipated in December. China's January consumer price index rose 2% compared to year-ago, but that was down from a 2.5% rise in December. Food prices were up 2.9%, while non-food prices rose 1.6%.
The long and short of it: The trade data signals China's economy continues to strengthen, while inflation is not a major threat to the economic recovery.
* February crop reports out this morning. USDA's February crop reports are typically a relative non-event and that should again be the case. USDA is expected to do little more than fine-tune the usage side of the balance sheets for corn, soybeans and wheat. The average pre-report guesses put corn carryover at 615 million bu. (602 million bu. in January), soybean ending stocks at 129 million bu. (135 million bu. last month) and wheat carryover at 728 million bu. (716 million bu. in January). On the global front, traders will be focused on USDA's assessment of crops in Brazil and Argentina, although most believe USDA will be playing catchup to private estimates.
The long and short of it: Barring an unexpected surprise, there should be limited market reaction to the data. But at a minimum, this will be another reminder that corn and soybean supplies are tight.
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