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Grain Comments: 02-06-2024

Good morning.

Ag markets have seen a decent start to the week, as corn and soybean futures have followed through on Monday’s higher closes so far in the overnight session. Funds are likely covering short positions and taking profits ahead of the possibility of a surprise cut in total South American production by either the USDA or CONAB on Thursday. Corn futures are up a half cent, soybean futures are 2-3 cents higher, and the Chicago wheat market is 1-2 cents higher. Products are mixed, soybean meal is down $2/ton, while soybean oil is up 70 points. Outside markets again mixed, crude oil futures are 40-50 cents/bbl higher, the stock market is marginally lower, and the US$ index is up 5 points.

Markets are thin again overnight, as traders await Thursday’s data dump. Position squaring will likely be the main theme between now and then.

ABIOVE, a private industry group in Brazil, lowered their forecast of the Brazilian soy crop yesterday by 2.6%, now estimating it at 156.1 mmt’s.

Same group also lowered Brazil soybean export forecast to 98.1 mmt’s, down 1.2% from their previous estimate. 2023 exports seen at 101.86 mmt’s.

Also, of note in the report from ABIOVE, Brazil crush was seen at 54.5 mmt’s (53.7 in 2023); Brazil ending stocks down 39% from previous estimate, at 5.7 mmt’s; and Brazil soy meal exports down 0.5% to 21.6 mmt’s.

IMEA also adjusted their Mato Grosso corn and soy estimates on Monday, slightly decreasing both. They now see MT corn at 43.3 mmt’s, and MT soy at 38.4 mmt’s.

Stock markets were lifted early Tuesday by news of government intervention in China’s markets. The country’s benchmark indices recorded their biggest one-day gain in nearly two years.

Rumors swirled of regulatory action intended to staunch selling and state-backed purchases by China’s government. President Xi Jinping will have discussions with financial regulators as early as tomorrow according to Chinese media.

Israeli forces killed 14 Palestinians in airstrikes overnight, as US Secretary of State Antony Blinken is in Egypt today for peace talks. This follows talks in Saudi Arabia on Monday.

The IDF has continued its bombardment of Khan Younis in southern Gaza, and is bearing down on the southern border area, where millions of Gazan’s are sheltering.

A second “Pineapple Express” weather system pounded Southern California on Monday, bringing torrential rain and wind which triggered flooding and landslides.

Isolated showers continue to dot Argentina before a front moves into the region Wednesday into Thursday. This front looks to produce upwards of 3+” in areas, which will be desperately needed.

North/Central Brazil continues to see good shower activity, with some harvest delays mentioned in local areas.

Have a great day!

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