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On the Grains
Grains are lower in overnight trade with soybeans down double digits as of 6 am. A sense of gloom pervades the market ahead of tomorrow’s flurry of reports, as if it’s already “dialing in” bearish numbers. Ironically, that tilts the odds against further losses even if pessimism is confirmed. When the trade “sells the rumor” and finds few left willing to sell, short-covering can ensue. It seems like grasping at straws, but that’s where we’re at right now.
Rains have resumed over much of Brazil and Argentina, relieving the recent stress that was reducing crop ratings. Now the outlook looks favorable again. The big debate is over how much yield hit was irreversibly done earlier in the growing season and we’re in the camp that it was considerably worse reflected in current official estimates by CONAB and USDA. (It’s spelled out in detail in this morning’s weekly Brazilian Operations Update below.)

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