Traders Expect Rain in 80% of S. American Growing Region, Fear Quick Return To Dry Conditions

Posted on January 9, 2012

March corn opened higher and traded in the of $6.51 to $6.57 per bushel range.  Soybeans opened .1275 cents higher and is currently up by .3350 cents to $12.23 per bushel.  With temperatures over 100 degrees and dry weather over the week, traders believe that corn and soybeans in Argentina and southern Brazil came under unrelenting stress over the weekend and that losses are mounting. This picture, tweeted by Gabriel Varela via @PalabraRural supports that position.

Source: Gabriel Varela @PalabaRural

Source: Gabriel Varela @PalabraRural

Traders expect rain in 80% of the growing region but fear a return to current conditions next week when temperatures are expected to rise again. The USDA confirmed a sale of 145,000 tonnes over US soybeans to an unknown destination. Traders also think that soybean production will be revised lower in Thursday’s WASDE report.