Market Report: USDA Report Tuesday

Corn held pretty well Friday, closing with gains of about 4 cents. Last week corn was down about 2 cents. Corn did set a new contract low, but there were no sell stops that were hit so that was encouraging. Where we go from here depends on the USDA report Tuesday. This is a big report that has a history of causing big moves both up and down. In addition to the usual numbers, we also get the quarterly grain stocks report.

Beans closed Friday about 2 cents higher but were up about 6 cents during the day. The funds are extremely short all the grains and if the USDA could give us a friendly or bullish report Tuesday we maybe could get a rally going. In addition to the USDA Report, traders are watching the weather in South America. It is really hard to get an understanding on what is going on in South America.  Most traders here just talk about how great the weather has been and how big the crop is. When you read weather reports from South America, look at rainfall totals. It appears they have seen some crop loss. Late last week I talked with Jim Bower with Bower Trading and he said his scouts estimate the bean crop in Brazil has dropped 5 MMT to 95 MMT. In the last USDA report, the estimate was 100 MMT. If Bower is right, that is about 200 million bushels of beans that will not be available to the world market! If the United States made up the difference that would almost cut our projected carryover in half from 460 million bushels to 260 million.