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NEAR-TERM MARKET FUNDAMENTALS: With soybean prices up near 50 cents for the month and up near the highest level since June, the market is seeing some long liquidation selling as the USDA reports failed to provide
any major surprises.

The short-term forecast is still harsh for another 3 to 4 days, but then it looks like a period of 10 days or so with good rain amounts and cooler temperatures for southern Brazil and especially Argentina.

Traders will monitor the weather closely for late January and early February. The market remains in a solid
uptrend and the USDA lowered South America production by 8 million tonnes. Given the weather situation in
southern Brazil and Argentina since January 1, production is likely to decline sharply in the next update.

At present, it may be reasonable to see another adjustment lower of 10 to 12 million tonnes in the February update.
Ideas that world ending stocks will continue to tighten with harsh weather for southern Brazil and Argentina
helped to support. The dry weather trend in Argentina’s main agricultural region since mid-December could
extend into mid-March, according to the Buenos Aires Grains Exchange.

For the USDA reports, US 2021/22 soybean ending stocks came in at 350 million bushels versus an average
expectation of 353 million and 340 million reported in December. Yield came in at 51.4 bushels/acre versus an
average expectation of 51.3 and 51.2 in December. December 1st soybean stocks came in at 3.149 billion
bushels versus an average expectation of 3.128 billion and 2.947 billion on December 1, 2020.

World 2021/22soybean ending stocks came in at 95.20 million tonnes versus an average expectation of 99.70 million (range95.00-103.60 million) and 102.00 million in December. Brazil’s 2021/22 production came in at 139 million tonnesversus an average expectation of 141.60 million (range 139.50-144.00 million) and 144.00 million last month.
Argentina’s production came in at 46.50 million tonnes versus an average expectation of 48.20 million (range
45.00-49.50 million) and 49.50 million estimated last month. For the weekly export sales.

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