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Corn Outlook:
Corn futures have been like a smoking gun since last week, as the potential for a larger crop has likely been priced into values and is causing the funds to cover their shorts. In addition, end users are stepping up to the plate and extending their coverage. Furthermore, planting has begun for the 2024-25 crop in Brazil with the prospect for 3.5 percent fewer acres because of low prices. This will put weather in the spotlight this fall and winter if a dry pattern develops. In other matters, export inspections last week were 38.0 MB with cumulative totals for the last week of the marketing year at 2.048 BB. This is short of USDA’s target of 2.250 BB. The bottom line in corn is that its recent strength has been from short covering by the funds. For gains to be sustained longer term, exports must improve, or a production shortage arise in South America.
Bean Outlook
Soybeans have garnered support from improved exports to China recently, albeit they are modest. Last week, export inspections were 18.2 MB with cumulative totals for the last week of the marketing year at 1.642 BB. This is short of USDA’s projection of 1.7 BB. China took 7.1 MB which was the largest shipment to them in over 3 months. The bottom line in soybeans is that a large harvest looms and improved exports are essential. As mentioned in last week’s commentary, during the past 3 years, U.S. exports have fallen 6.5 percent, while those from Brazil have risen 10 percent. Right now, the funds have a large, short position and are beginning to cover. However, to sustain values longer-term, exports must improve dramatically, or a production threat arise in Brazil. Currently, central Brazil is experiencing dry conditions which may gain attention ahead of their planting.
Wheat Outlook:
Wheat is gaining support from the strength in corn and dryness in the Black Sea region which has slowed winter planting. Furthermore, Ukraine is reducing their exports which could swing business to the U.S. That may already be happening as inspections last week were the second highest of the marketing year at 21.2 MB. Right now, we are running ahead of the pace needed to reach USDA’s target of 825 MB. In other developments, harvest of the spring crop is 70 percent complete which is par for the average. The bottom line in wheat is that the fundamentals are slowly improving.
omments and suggestions are provided for information purposes only. Information contained herein is obtained from sources believed to be reliable but not guaranteed to its accuracy or completeness. Readers using the information contained herein are responsible for their own actions. No presentations can be made that recommendations will be profitable or that they will not result in losses. This information is neither an offer to sell nor solicitation to buy of the commodity futures mentioned herein. The writer may be trading in the commodities mentioned.