03/06/2023 Grains Weak Overnight Despite Further Cuts to Argentine Crop Estimates

On the Grains: Markets are soft in overnight trade as we go to press. That suggests that for corn and beans, traders have already dialed in expectations that USDA will drop its estimates of Argentine corn and soybean crops dramatically in the March WASDE on Wednesday. This was key to the late week recovery in both corn and beans from fund long liquidation that began the week before as the calendar turned to March. We got another COT report Friday but it was only current through Feb. 7 and showed fund liquidation had already begun. Funds’ net long position in corn was down nearly 18,000 contracts (but with still over 200K to go). In beans, they’d reduced their long position by more than 10,000 contracts but still 165K to go. The 3-day bounce that we saw late last week suggested that liquidation tied to March going into delivery had finally eased. We also know the trade is well aware of private estimates of Argentine crops smaller than the ones expected from USDA on Wednesday. Are they fully dialed in as well? Overnight weakness would suggest they may well be. Or how about the fact those private estimates just keep on dropping? Over the…