Morning Comments; Wednesday, February 13, 2019

Corn and soybeans are trading steady to higher this morning.

The firm CONAB released their updated production forecasts for Brazil yesterday. The firm lowered their soybean production estimate to 115.3 MMT, which is down 3% and in the mid-range of expectations. Their corn production estimate increased 460 KMT from January and is now pegged at 91.65 MMT. Drought conditions reduced the size of the 1st crop corn but the return of showers of late triggered them to increase the size of the safrinha crop.

Last week’s USDA report showed the largest corn yield decrease from the November to January report in recent history. Many analysts were shocked last summer as USDA yield forecasts continued to climb throughout the summer. At their highest forecast, corn yield was estimated 4.9 bushels per acre higher than last week’s release. Of the 25 major corn producing states, 19 showed reduced yields in Friday’s report.

The USDA reduced China’s soybean import forecast in their latest release. The forecast now stands at 88 MMT, which is a 6 MMT drop from last year and the only decline reported since 2003/2004 marketing year when a late season drought and the first infestation of aphids cut the soybean crop. The following year, exports to China increased nearly 9 MMT. Exports since then, had seen steady growth, until this year.

Market Movers; Chinese trade discussions and ethanol data.




 

Market Commentary provided by:

Karl Setzer Grain Commentary