USDA forecast a record 15.23-billion-bushel corn crop on Thursday, with the 1.9-bushel-per-acre yield bump confirming anecdotal accounts of satisfying yields given the season's growing condition.
DTN Lead Analyst Todd Hultman said a lot of that goes back to USDA's estimate that farmers planted 94.1 million acres of corn.
"I have to say, in the big picture, it doesn't fundamentally change expectations a lot," Hultman said of the record crop forecast. "But that headline and that little bit of shock was enough to pressure prices down to a new contract low."
Soybeans, on the other hand, saw ending stocks increase, albeit slightly. But there, the focus of the market shifts to South America, where El Nino-driven weather patterns are causing concern.
Argentina, which was decimated by drought last year, is receiving good rains. This year, showers appear to be skipping Brazil's northern growing regions, including Mato Grosso.
"What we've seen across Brazil is similar to what we saw in the U.S. to start our growing season," DTN Ag Meteorologist John Baranick said, comparing Argentina to the drought improvement in western Nebraska, Kansas and western Texas. Things started well in the Eastern Corn Belt, "but then it got really dry, of course. Brazil's kind of in the same spot, except it's a little more extreme than it was here."
Baranick continues his discussion of the variable weather conditions across Brazil in this week's "In the News" video. Hultman also discusses the potential market implications of Baranick's forecast. You can watch the video here: https://www.dtnpf.com/….
Katie Dehlinger can be reached at firstname.lastname@example.org
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