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Corn Outlook:
Corn continues to trend lower as the fundamentals remain negative creating a gloomy outlook. However, the landscape is currently overpopulated with bears as evident from the fund short position growing to 1.460 BB, the largest since June 2020. Meanwhile, end users are long, and when this type of situation develops, a recovery can develop without warning, and for no apparent reason. In the meantime, exports are a sore spot with inspections last week at 24.5 MB, the lowest since the first week of January. In other matters, the USDA raised ending stocks 10 MB to 2.172 BB, but lowered world stocks 3.1 million tons to 322.1 million. Brazil’s crop fell 3.0 million tons to 124.0 million while Argentina’s production stayed unchanged at 55.0 million. Although world stockpiles were lowered, they remain elevated.
Bean Outlook
Soybeans remain on a slippery slope as China’s economy is struggling, and Brazil’s harvest is getting into full swing at 16 percent complete compared to 10 percent for the average. Export inspections last week were impressive at 52.4 MB, the highest seen since late November. China took 35.1 MB, their largest shipment since the third week of November. With the funds sporting their largest short position since May 2019 of 730 MB, and end users adding to their longs, the funds may be prone to cover. Meanwhile, in other matters, USDA increased ending stocks 35 MB to 315 MB which was more than expected. The increase came from a reduction in exports. World stocks rose 1.4 million tons to 116.0 million which was also more than anticipated. Looking at Brazil, their production fell 1.0 million tons to 156.0 million while Argentina’s crop was left unchanged at 50.0 million. Bottom line is there is little to get excited about with these numbers.
Wheat Outlook:
Wheat is being pulled between expectations for improving exports out of Ukraine, and the escalation of tensions in the Middle East from Iranian backed militia groups. In addition, signals coming from the Federal Reserve are that lowering of interest rates may come later rather than sooner, which has strengthened the dollar. Meanwhile, exports are not very encouraging with inspections last week a token 9.7 MB. Since early January, the pace of shipments has fallen 26.9 percent. In other matters, USDA increased ending stocks 10 MB to 658 MB, but lowered world stockpiles 600,000 tons to 259.4 million.
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