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Corn Outlook:
For weeks, the corn market was underpinned from fund short covering, but that may be ending as harvest is in full swing. Last July, the funds were short a massive 1.860 BB but have whittled their position down to 485 MB as of last week. With harvest underway at 30 percent complete, weather having an open window for the next couple of weeks, and the prospect of an enormous crop, they may hold their existing short position. Looking at exports, inspections were disappointing last week at 36.1 MB and below the average of 45.3 MB that must be shipped weekly to meet USDA’s projection of 2.3 BB. Although the pace of shipments is running above the 5-year average, it may be a struggle to reach their target if South America produces a normal crop.
Bean Outlook
Soybeans have run into a headwind as harvest is running full steam ahead at 47 percent complete versus the average of 34 percent. Furthermore, central Brazil has been dry, but their rainy season is beginning, and they are expected to see a shift to wetter conditions next week. Meanwhile, the near record short position of 920 MB the funds held last July has been trimmed to 315 MB as of last week. Regarding exports, inspections last week were a marketing year high of 52.5 MB with China taking shipments of 25.9 MB. They will likely continue to be active buyers from the U.S. until November when their focus, at that time, will turn to South America. When their interest peaks, the pace of shipments usually falls 80 percent.
Wheat Outlook:
Winter wheat planting is progressing without interruption and is 51 percent complete compared to the average of 52 percent. Prices were supported this week from continued dry conditions in Russia, and the possibility they will restrict exports. Looking at our exports, inspections last week were disappointing at 13.3 MB and below the average of 14.9 MB that must be shipped weekly to reach USDA’s target of 825 MB. The pace of shipment peaked a couple of weeks ago and has since declined. However, they are still on track to meet USDA’s projection.
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