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Investors Eye Tuesday's USDA Report

Large stocks estimates to fall slightly.

Generally, calm trade was seen again today as the official trade estimates for Tuesday's report showed a carryout reduction, just not a very large one.

Official estimates on carryout came out just after the close yesterday at 2.180 for corn compared to the August USDA report number of 2.273. This is only a reduction of 93 million bushels from carryout which shows that trade isn't expecting much of a surprise next week.

It's possible that analysts have gone more conservative partially due to being off as much as they were on the last report. If true, that is not the best approach to use on the following report because once again anything is possible. Traders are being just as cautious as the analysts still pricing in a December corn price which would factor in a small yield increase.

While analysts are cautious and bullish the traders still have price at a level that is so cautious it is still pricing in a slight bearish report. This caution is unlikely to change on Monday so we should expect another relatively calm trading day to start next week as well. From there the report will guide this market into harvest where we will then adjust price based on actual yield reports.

Bulls
    •Analysts are pricing in a 93 million bushel decline in ending stocks even though price is factoring in a small increase in carryout
    •Any carryout reduction seen next week could change the overall mindset leading to a slow increase in price going forward
    •Funds are likely still holding a small short position which would also need to be covered if carryout is reduced
    •Weekly exports came in at 1121 right at the high end estimate
Bears
    •Unless December bounces to around 370 bears want to remain cautious as price is already factoring in a slightly bearish report
    •The benefit that bears have is that if carryout is left unchanged there is still a chance to see some disappointment selling.

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