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Corn Outlook:
Frigid temperatures in the upper Corn Belt gave corn futures a lift on Monday. However, prices backpedaled Tuesday-Wednesday from dollar strength. Planting is winding down at 85 percent complete, which means traders will be more sensitive to weather and crop ratings in the weeks ahead. Be aware that the trend following funds are sporting a record short position of 785 MB heading into the growing season. This leaves them a narrow exit if Mother Nature decides not to cooperate this summer. Other than weather, the factor most likely to impact corn values will be the June 30th Acreage Report. Exports have been on the upswing since early April with inspections last week at 43.6 MB, above the average needed to reach USDA’s target of 1.825 BB.
Bean Outlook:
Soybeans have a long road ahead of them this season unless weather becomes a factor, as global stocks are at a record level, and increased plantings are forecast in the Midwest. Planting is progressing at a fast clip with 45 percent of the crop in the ground compared to the average of 36 percent. However, Kansas, Missouri, and Nebraska are lagging at 14, 11, and 10 percent below their average. Episodes of scattered showers in the forecast may add to their delay, but are not a great concern. Since mid April, soybeans have traded mostly in a sideward pattern because of the trend following funds lightening their short futures position. However, that appears to be changing as they sold 50 MB last week increasing their position to 170 MB. This is not a large position meaning that there is room for it to grow. In other developments, export inspections last week were 12.5 MB with China a no show for the third consecutive week.
Wheat Outlook:
Heavy rains in the southern Plains recently have increased concerns about the quality of the crop. This precipitated prices rising on Monday to their highest level in over a month. Until last week, the trend following funds were holding a record short position of 555 MB. However, they have since shed 25 MB reducing their shorts to 530 MB. The decline in the dollar over the past several weeks is supportive to wheat, but it appears that the buck may be striking a bottom. Meanwhile, the crop ratings improved one point last week rising to 45 percent in good-to-excellent condition. This compares to a rating of 29 percent a year ago. Export inspections last week considered routine at 11.7 MB.
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