Bearish report day to kick off 2024

By Bennett Musselman, Leist Mercantile

Trade expectations: lower U.S. soybean exports, higher U.S. corn for ethanol, lower Brazil soybean production.

U.S. highlights: U.S. 2023 final corn production 15.3 billion bushels, 177.3 yield ; last month production of 15.234 billion bushels, yield 174.9. U.S. final soybean 2023 production 4.16 billion bushels, 50.6 average yield; last month 4.129 billion bushels, yield 49.9.  

Following the noon USDA report release, corn was down 11 ½ cents, soybeans down 22 ¾ cents, and wheat down 4 ¼ cents. Moments before the report was released, corn was down 3 ½ cents, soybeans up 1 ¾  cents, and wheat down 1 1/2 cents.

US 2023-2024 ending stocks: corn 2.162  billion bushels, last month 2.131 billion bushels; soybeans 280 million bushels, last month 245 million bushels; and wheat 648 million bushels, last month 659 million bushels. 

Trader estimates for 2023-2024 U.S. ending stocks: corn 2.105 billion bushels; soybeans 239  million bushels; and wheat 658 million bushels. 

Traders will be watching very closely U.S. corn stocks as of Dec. 1, 2023. If those stocks are 1.3 billion bushels or more above those of Dec. 1, 2022, which was 10.821 billion bushels, it will be a bearish hurdle to overcome.

Trading ranges for corn could easily exceed 10 cents while the soybean trading range could exceed 25 cents. Key will be the closes in relation to prices just before the report.

Today’s January USDA report day includes U.S. corn and soybean production and yields, U.S. grain stocks as of Dec. 1, U.S. winter wheat acres, as well as South America soybean and corn production. Watch for plenty of price volatility in the last 2 hours of the trading day. Watch in particular how soybeans close today. Both soybeans and corn have seen huge price erosion the past 2 months. Bottom line, grains need to see some export news as well as announcements. The funds have been short corn and wheat for months, beans just turned short in the past 2 weeks. They will be ongoing sellers until some news or weather event gets their attention.

Just like the bullish news is the most bullish at the top, the bearish news will be the most bearish at the bottom.

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