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Analyst warns of downside risk in grain markets

An analyst warns a bearish undertone could be building in the market.

Karl Setzer with AgriVisor tells Brownfield while there’s still some upside potential, the stocks to use ratio hasn’t changed much since corn was around $5.50 and soybeans were at $12.50.

“So we do have some downside risk. And South American harvest, we’ve already seen some harvest activity on soybeans coming out of Brazil. Not enough to really alter the market, but that’s just going to build and build and build.”

He says even if weather limits South American production, Brazil is still expected to harvest a huge crop.

“Even at the low end of estimates coming in around 143 to 144 million metric tons, that’s still 7 million metric tons larger than the crop Brazil produced last year. And they’re still exporting those soybeans.”

Setzer says Wednesday’s USDA supply and demand report also contains the final U.S. production numbers for 2021 which he predicts will spark volatility. 

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