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On the Grains: Grains are soft again in overnight trade. One of the harsh realities of fungible commodities is that during times of surplus like we face in corn, prices need to sink to what economists call “market clearing levels” where a combination of declining production and increased demand absorbs the surplus. Unfortunately, there’s little evidence that “market clearing level” has yet been reached. The big problem we’re facing now is that there’s no expectation for significant declines in production or evidence that lower prices are boosting demand “enough” to avoid rising ending stocks for the 2024-25 balance sheets. That makes the “carry” in futures markets for corn and wheat sufficient incentive for funds to just keep on selling. There’s little such “carry” in soybean futures, but for that commodity the looming South American harvest has prices there plummeting while the world’s top soybean importer, China, has just absorbed more bearish news about its own economy. It’s the court-ordered liquidation of its second biggest real estate giant, Evergrande, to the tune of $300 billion. That country is already struggling with deflation, a shrinking workforce land disinvestment by foreign companies operating there. In wheat, the surplus is not that big, historically-speaking….

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