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Corn Outlook:
The Ides of March are just around the corner. They can produce a tumultuous time for the grains as the bulls and bears spar to see who gets the upper hand during the growing season. The acreage debate will heat up between corn and soybeans, as well as spring-summer weather coming into the spotlight. Right now, soybeans are the favorite to gain acres with the spring weather forecast calling for normal to above normal temperatures and normal precipitation. Last week, the funds did some posturing as they flipped from a short position in corn of 50 MB to a long of 105 MB. The chances are that they will maintain a long position of some degree until planting is complete and the crop become more established. Looking at exports, inspections last week firmed up at 49.4 MB and were above the average needed to reach USDA’s projection of 2.225 BB.
Bean Outlook:
Soybeans have been trekking upward since early February with analysts quick to point out that demand is driving values higher. This is true to an extent as demand has increased 4.1 percent from a year ago. However, production has risen 10.6 percent outpacing demand by 5.6 percent. Meanwhile, Brazil is headed for a record crop and more acres are expected to be planted in the U.S. this spring. This means that another factor could be underpinning the market, and was addressed in a recent report sent to Ag Watch clients. Looking at exports, inspections last week were 42.0 MB. The overall pace of shipments improved two weeks ago, but has since turned down again. Since peaking in November, the pace has fallen 48 percent. In other developments, the funds lightened their longs 25 MB last week reducing them to 640 MB. This was their second week of liquidation
Wheat Outlook:
Wheat has marched higher as the market has risen above an area of resistance forcing the funds to cover short positions. Last week, they liquidated 65 MB reducing their short position to 465 MB. Any shorts established since August are currently underwater. Looking at exports, inspections last week were disappointing at 11.2 MB and below the average needed to reach USDA’s target of 1.025 BB. If the current pace continues, it will be a struggle to achieve their projection.
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