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Grain and soy markets appear to be treading water here in front of the March USDA numbers as if the will really have something fresh and enlightening to tell us. Yes, there will be updates on the USDA opinion of the South American crops, but it is not as if everyone has not seen reports from Conab, The Buenos Aires Grain Exchange, AgRural, etc., so it is difficult to imagine there will be much of a surprise in store.
The problems in Argentina is a given at this time but the shortfall in production of both corn and beans there appears to be creating some opportunities and possibly a few changes in Brazil. It has generally been assumed that the late planting that took place in that country this past spring had all but assured a disappointing safrinha crop, in part due to the lateness of which that second crop would be planted, but also because prices were already quite depressed. In many areas that has changed dramatically with advances of over 20% during the past 30-days. With this type of boost, farmers may now be incentivized to become a bit more aggressive in getting that crop planted. While by no means would that assure a larger crop, and some of the potential acres have already lost out to cotton, but a few private forecasters have already been pushing up production estimates. This would be a prime example of how free markets should work.
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