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Corn Outlook:
This week’s decline in corn has probably spooked the bargain hunters until after. Pressuring the market is exports have been slipping the past couple of weeks, plus we are headed for our third consecutive record yield. Last week inspections stood at 37.3 MB and were below the average needed to reach USDA’s projection of 2.475 BB. The reason for the slippage is that shipments were very likely front end loaded earlier this season because of concerns surrounding the U.S-China trade spat. Meanwhile, harvest is 49 percent complete compared to 37 percent a year ago and 47 percent for the average. Last week, the funds whacked 265 MB from their shorts reducing them to 140 MB.
Bean Outlook:
Soybeans continue to struggle as the U.S.-China trade feud, in addition to record stocks, casts a dark cloud over the complex. While U.S. exports have suffered, China’s stock market has declined nearly 22 percent since the spat began. Meanwhile, their GDP has fallen from 6.8 to 6.5 percent. Long story short, it has taken a toll on their economy. While U.S. exports are down 40 percent from a year ago because of the dispute, the pace has improved the past couple of weeks. Inspections last week were 42.2 MB and above the average needed to reach USDA’s target of 2.060 BB. However, even with the recent improvement, their projection is likely to be lowered. In other developments, harvest is lagging at 53 percent complete compared to 67 percent a year ago and 69 percent for the average. Looking at the funds, they reduced their short position 35 MB last week to 470 MB.
Wheat Outlook:
Wheat needs a story to tell but is unlikely to see one until the crop is planted and the focus turns to weather and development. Currently, 72 percent of the winter wheat crop is planted compared to 73 percent a year ago and 77 percent for the average. The albatross hanging around the market’s neck continues to be the lack of exports. Inspections last week were mediocre at 14.1 MB and must average 22.6 MB each week to reach USDA’s target of 1.025 BB. While they will likely pick up once exportable supplies from Russia are diminished, their projection will probably be lowered. Looking at the funds, they are mostly inactive and hold a short position of 215 MB.
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