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Corn Outlook:
The grains got one monkey off their back this week with the release of the long-awaited prospective planting and grains stocks report which showed a 4.7 million increase in corn acres to 95.3 million, the highest since 2012. While this was more than expected, the market seemed to take it in stride. Meanwhile, the other monkey, Trump’s tariff agenda, may take a while to shake off. As it stands now, it will be reciprocal with a minimum 10 percent tax on imports from most of our trading partners, but higher on others. However, the exemption for USMCA goods will continue for Mexico and Canada. Right now, there are more questions than answers surrounding the market impact, especially retaliation from our partners. That aside, one bright spot in corn is exports. Last week, inspections were 63.5 MB and have been rising since early January. At the present pace, they could exceed 2.7 BB versus USDA’s estimate of 2.450 BB. However, with possible retaliations hanging over the market’s head, the question is, will the pace continue?
Bean Outlook
The prospective planting report this week showed soybean acres falling 3.5 million to 83.5 million which was considered friendly. However, the market response was limited as the numbers seemed to have been baked into values. Meanwhile, the Trump Administration has placed a 34 percent tariff on goods from China, in addition to the 20 percent already in place for a total of 54 percent. This will likely stifle their demand for U.S. soybeans. However, most of their needs are being met from Brazil anyway. Last week, export inspections were 29.1 MB with China taking 22.8 MB. Since mid-November, deliveries to China have declined 70 percent.
Wheat Outlook:
Wheat is showing signs of life following two weeks of declining values. The crop is emerging from dormancy, making it more susceptible to adverse growing conditions. Meanwhile, the report this week showed all wheat acres declining more than expected to 45.3 million, down 700,000 acres from last year. The funds are sporting a short position of 485 MB and may be prone to cover as the crop is in its critical stage of development. Meanwhile, exports continue to disappoint. Last week, inspections were 16.0 MB and below the average of 22.1 MB that must be shipped weekly to meet USDA’s target of 835 MB. Right now, we are on track for shipments of 770 MB.
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