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Corn Outlook:
It looks like the heat will be turned up in the Corn Belt for the next couple of weeks with daytime temperatures in the mid 90’s and nightly lows in the 70’s. This could knock off some of corn’s yield potential. However, the double-digit price decline posted on Monday implies traders are more preoccupied with China’s import tariff that will go into effect at the end of the week. Although they buy a miniscule amount of corn from the U.S., it is a cloud overhanging the market. In other developments, export inspections last week were solid at 60.5 MB. Right now, shipments are on track to slightly exceed USDA’s target of 2.3 BB. Last week, the crop rating fell one point to 76 percent in good-to-excellent condition. The funds have been active as they flipped from a long to a token short position of 40 MB.
Bean Outlook:
It is showtime as China is slated to carry out their planned import tariff on U.S. soybeans beginning July 6th. Keep in mind that they cannot meet the needs of feeding their livestock industry from South America alone. At some point, they will need to buy U.S. soybeans whether it be sourced through Japan, South Korea, or someone else. Meanwhile, exports have improved slightly with inspections last week at 31.2 MB, the highest since May. However, it is going to be a close call in reaching USDA’s projection of 2.065 BB. Looking at the crop rating, 71 percent is listed in good-to-excellent condition, down 2 points from the previous week. Last week, the funds added 115 MB to their shorts increasing them to 380 MB.
Wheat Outlook:
Production cuts in the EU and Russia are supportive for wheat, but trade tensions with China offer resistance. Keep in mind that they buy little wheat from the U.S. Meanwhile, exports are sluggish with inspections last week a marketing year low of 11.9 MB. We must ship 18.6 MB each week to reach USDA’s target of 950 MB. Right now, mediocre exports are the biggest factor holding values down. Meanwhile, harvest has reached the halfway mark at 51 percent complete versus the average of 49 percent. Looking at the funds, they have increased their short position to 200 MB.
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