Few changes in US numbers from last month. Smaller Argentine crops.
The government’s US numbers were virtually the same as a month ago, with smaller crops in Argentina, and a slightly larger bean crop in Brazil. Today’s estimates were no surprise to the traders.
Look at the prices we’ve traded during the past month. Traders have no fundamental reason to move prices beyond that range. The Argentine crop is still an uncertainty because its in the early stages of harvest, but the Brazilian bean crop is nearly in the bin and the second crop corn is off to a good start.
The new risk is in the United States and all the northern hemisphere where planting has just started. Next month’s prices will trade based on how traders view the crop plantings and weather risk. Today’s numbers told us again that we need big crops.
Traders will turn their attention to the weekly planting progress numbers, exports, and ultimately the May USDA report where we see the first official 2023/24 crop estimates.
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Source: USDA, Bloomberg