What Traders are Talking About:
* Rains, cooler temps move into southern Argentina. A cold front is bringing some relief from the prolonged heat and dryness to southern Argentina this morning. The rains and cooler temps are expected to move into central and northern parts of the country later today and tomorrow. Southern Brazil is in line for some relief from heat and dryness Thursday and Friday as the cold front moves eastward. The relief is expected to be brief, however, as hot, dry conditions are forecast to return once the front passes.
The long and short of it: Soaking rains are expected in some areas, which will be beneficial, especially for soybeans. But after a prolonged hot, dry period, the rains are too late in many areas, especially for the corn crop.
* Brazil gov't adjusts crop estimates. Conab, USDA's equivalent in Brazil, lowered its corn crop estimate to 59.2 MMT and raised its soybean crop estimate to 71.75 MMT. Last month, Conab estimated the Brazilian corn crop at 60.32 MMT and the soybean crop at 71.29 MMT. The agency said it won't be able to fully assess impacts from prolonged hot, dry conditions in southern growing regions until next month.
The long and short of it: Conab's Brazilian crop estimates were labeled "conservative" compared to most private crop estimates. But with private firms consistently lowering crop forecasts recently amid the hot, dry conditions in southern Brazil, Conab's estimates are no longer out of line compared with others.
* Index fund rebalancing begins. Index funds began their annual rebalancing of positions yesterday. Estimates signal index funds will sell 26,000 contracts (130 million bu.) of corn and 600 contracts (3 million bu.) of soybeans. On the "buy" side, index funds are expected to purchase as estimated 28,000 contracts (140 million bu.) of Chicago wheat, 2,600 contracts (13 million bu.) of Kansas City wheat and 16,000 contracts (80 million bu.) of soyoil.
The long and short of it: Index fund rebalancing is expected to continue throughout the week.
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