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Traders look for increased trend line yield estimates

AUDIO: Brian Grossman, Zaner Group

Grain trade analysts have been closely watching weather in Argentina, or lack thereof for quite some time. However, analysts Friday will shift some of their attention toward the United State Department of Agriculture’s (USDA) Grains and Oilseeds Outlook. A market strategist shares analyst estimates and a potential market reaction.

Brian Grossman is market strategist for Zaner Group. Grossman says analysts expect to see higher trend line yields outlined in USDA Grains and Oilseeds Outlook.

“(I’m) very curious to see if USDA is going to adjust, given the last few years we have been well off on what final yield numbers are,” Grossman said. “That is going to be a pretty big question mark, but will be a game changer for the markets depending on what kind of a trend line they decide to go with. Corn could be close to the 174 mark for trend line yield and for soybeans, I say between 47 and 48 are pretty good reference starting points.”

Grossman adds Friday’s report will slightly impact futures trading.

“The impact would most likely (be) bearish,” Grossman said. “We have a weather story helping  drive us along. We have a lot of grain out there, and if we start to see trendline yield estimates come in higher than what we’re thinking, it’s just more bushels on the balance sheet.”

Grossman says analysts will continue to monitor weather in Argentina following Friday’s report.

“They are continuing to be hot and dry, but there’s now more concern shifting into Brazil. A lot of rain moving in through the key states of Piranhas and Mato Grosso and they’re struggling to get that soybean crop off. Not only are we going to be looking at potential quality issues with the Brazilian crop, but we’re also behind on getting the winter corn crop planted,” Grossman said.

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