What Traders are Talking About:
* USDA delivers another knee-buckler. Traders are still buzzing about Thursday's USDA report data. As I mentioned yesterday, the biggest surprise came in Dec. 1 corn stocks, which were 241 million bu. above the average pre-report trade guess. That triggered a sharply lower to limit-down close in corn futures yesterday which expands the daily trading limit to 60 cents today. Soybeans and wheat posted sharp losses in reaction to USDA's report data, but futures in both markets finished well off session lows. As a result, soybean and wheat futures have normal trading limits of 70 cents and 60 cents, respectively, today.
The long and short of it: With USDA throwing another curve ball at the corn market, there is a lot of pressure on corn bulls to defend current price levels. If corn futures fall below the December lows, it would be technically damaging and would open sharp downside price risk.
* South American weather update. Rains will linger through areas of southern Brazil (Rio Grande do Sul, Parana, Mato Grosso do Sul) today and possibly into Saturday in some locations. Temps are expected to be much cooler into the early to middle part of next week. Rains have left Argentina and conditions are expected to be hot and generally dry, although not as hot or dry as they were ahead of this week's rain event.
The long and short of it: Crop stress has eased in South America after this week's rains and cooler temps. But the rains came too late for crops in areas hardest hit by drought, especially for the corn crop in these areas.
* Grain and livestock markets closed Monday. Grain and livestock markets will be closed Monday, Jan. 16, for Martin Luther King Jr. Day. Government offices are also closed. Grain trade will resume with the overnight session at 6:00 p.m. CT Monday, while livestock markets will remain closed until Tuesday morning.
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