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#SaxoStrats
Today's edition of the Saxo Morning Call features the SaxoStrats team discussing the continuing weakness of the US dollar as commodity prices recover ground and in the wake of key US equity indices hitting all-time highs Thursday.
Squawk / 10 August 2017 at 9:21 GMT
Head of Commodity Strategy / Saxo Bank
Denmark
The USDA will publish its monthly 'World Agriculture Supply Demand Estimate' report for August later today at 1600 GMT. Last months report helped trigger a sell-off which eventually saw a complete reversal of the strong gains witnessed during early July.
Today's report will focus on corn and soybeans as it will include first assessments of the 2017 crops based on field surveys. Analysts are forecasting a lowering of the yield in both crops with a Reuters survey pointing to a cut in corn yield of 4.5 bushels per acre to 166.2 bushels and a 0.5 bushels-per-acre reduction to 47.5 bushels per acre in the forecast for the soybean.
Open interest, especially in corn, has been cut continuously during the past four sessions as traders ease up on positioning ahead of the report.
Attached the average survey results from Bloomberg and Reuters
2y
Ole Hansen Ole Hansen
Yesterday's WASDE report was one big bearish surprise with all components showing a stronger result than the surveys. As mentioned this was the first assessment of corn and soybeans crop based on field surveys. The government saw ending stocks for corn beat surveys by 15% and soybeans by 11%. Global wheat stocks were higher due to an up revision to production in Ukraine and Russia.
Not least corn came under pressure with the December contract falling to the lowest in almost a year. Further price developments now depends on the fund positioning with heavy selling having been witnessed since they got caught in a bull trap during the early parts of July.

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