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Corn Outlook:
The fundamentals for corn remain negative, but there are signs that the bears welcome mat might be wearing thin. This can be seen from the Commitment of Traders Report last week showing the funds being short 1.355 BB, their largest position since June 2020. Meanwhile, commercial users are long 260 MB which implies they are struggling to secure the cash. Whenever this type of situation occurs, it frequently results in the funds covering their shorts. In the meantime, exports are a sticking point, but there was an uptick in inspections last week to 35.5 MB. However, this is below the average of 47.8 MB that must be shipped weekly to achieve USDA’s target of 2.1 BB. So far, the largest shipment this season has been 42.5 MB. The bottom line in corn is that even though the funds are heavily short, and users are committing to the long side, the funds will probably not abandon their shorts until we are closer to planting.
Bean Outlook
A situation is developing in soybeans like corn in that the funds are short 580 MB, their largest position since June 2019, while commercial users are long 90 MB. This suggests that the bears should watch their step against being too aggressive. Meanwhile, looking at exports, inspections last week were 32.6 MB with China taking 17.9 MB. Although the pace of shipments to them has picked up the past three weeks, our overall deliveries have declined and are down 52.6 percent from their peak in early November. The bottom line in soybeans is that weather in Brazil is losing its influence as a factor which means exports will have to shoulder the load.
Wheat Outlook:
Wheat is being tugged from increased attacks against commercial ocean vessels in the Red Sea by Iranian backed militia groups, recent moisture improving conditions in the southern Plains, and anemic exports. Last week, export inspections were only nominal at 9.7 MB and well below the average of 17.8 MB that must be shipped weekly to reach USDA’s projection of 725 MB. So far, this season, there has not been a shipment of this magnitude and shows our lack of competitiveness in the global market.
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