What Traders are Talking About:
Overnight highlights: As of 6:00 a.m. CT, corn futures are 1 to 2 cents lower, soybeans are mixed and wheat futures are mostly 2 to 4 cents lower. USDA's report data later this morning will determine how markets close today. Trade should be light ahead of the report release. Cattle and hog futures are expected to open mixed.
* Snow closes some gov't offices, but USDA reports on as scheduled. USDA will release its December crop reports as scheduled this morning even as snow has caused many government offices to close. Meanwhile, with federal offices closed today due to inclement weather and some lawmakers unable to return to Washington, the congressional schedule for the week is in flux.
* December crop reports to feature minor fine tuning. USDA does not update its corn and soybean crop estimates this month -- the only crop update will be cotton. In the Supply & Demand Report, traders are expecting carryover projections for corn, soybeans and wheat to tighten from last month with the average pre-report guesses at 1.861 billion bu. for corn, 154 million bu. for soybeans and 553 million bu. for wheat. Much of the focus will be on the soybean export forecast. While export bookings, which are nearly to USDA's forecast, signal an increase is coming, USDA may not be as aggressive as most think. With a record South American soybean crop on the way, USDA has a reason to wait before aggressively upping its export forecast. With that said, USDA needs to show the trend on soybean exports, which is up. For corn, even with a modest cut to carryover, today's report will be a reminder that the tight supply situation has been "cured."
The long and short of it: If there's going to be a bullish reaction to the report data, it likely has to come from soybeans, though I don't believe USDA will cut its soybean carryover projection as much as traders are anticipating.
* Brazil updates crop estimates. Conab, the statistical forecasting agency of the Brazilian government, now sees the country's soybean crop at a record 90.03 MMT compared to a range of 87.9 MMT to 90.2 MMT last month. The corn crop is forecast at 78.8 MMT versus a range of 78.5 MMT to 79.8 MMT last month. The wheat crop forecast was raised to 5.36 MMT from 4.81 MMT in November given favorable weather.
The long and short of it: The record soybean crop is not a surprise. The Conab corn crop forecast, especially the safrinha (second crop) estimate, is a surprise as it's above (well above) most private forecasts.
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