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Corn Outlook:
Grain traders continue to assess Trump’s tariff policy that seems to change daily and its potential impact on ag, primarily exports. Many think that behind-the-scenes deals occurring with our trading partners might give exports a boost. Reports are circulating that China has laid out preconditions for resuming talks. Meanwhile, shipments of corn have been unscathed by the tariffs, so far. Last week, inspections were a marketing year high of 72.0 MB with Mexico taking the lions share of shipments followed by Japan. If the current pace continues, exports could reach 2.750 BB compared to USDA’s target of 2.550 BB. However, this may be optimistic thinking. Meanwhile, planting is getting underway and is 4 percent complete compared to 6 percent a year ago and 5 percent for the average. The bottom line in corn is that with the expected increase of 4.7 million planted acres, our exports must remain strong to see further price gains.
Bean Outlook
Concerns remain regarding the impact the trade war between the U.S. and China, our largest soybean customer, will have on exports. Meanwhile, there are rumors that negotiations may soon resume. Putting the situation into perspective, U.S. exports to China have been declining since 2020, while shipments from Brazil have been rising. With Brazil’s production having grown since 2000, this trend is unlikely to change as China has invested billions of dollars in their infrastructure. Last week, export inspections were 20.0 MB, the smallest shipment since last September. China took 4.9 MB, which was a low for the season. Since mid-November, deliveries to them have declined 74 percent, while our overall shipments have fallen 68 percent. The bottom line in soybeans is that business to China has been on the downswing for five years and we must develop interest from other sources.
Wheat Outlook:
Global stocks of wheat have been falling since 2019, but there has been little price response. This is probably because U.S. stocks have been rising since 2022. Furthermore, domestic consumption has been largely flat since 2017. Meanwhile, exports have picked up recently with inspections last week at 22.2 MB, their largest since late September. We must ship 21.1 MB on a weekly basis to meet USDA’s target of 820 MB. Last week, the crop rating fell one point to 47 percent in good-to-excellent condition and compares to last year’s rating of 55 percent. Currently, the factor the bulls have in their corner is the funds are short 505 MB. However, a trigger is needed causing them to cover.
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