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Corn Outlook:
What will it take to bring the bulls back to corn? The most obvious answer is for a flare up in weather. However, that may not happen as the forecast through the end of the month is for above normal temperatures, but also with normal to above normal moisture. Right now, seventy-four percent of the crop is rated in good-to-excellent condition, which is down one-point from last week, but above last year’s rating of 61 percent and the 10-year average of 70 percent. With a potential strong crop in the making, that leaves exports as the other possibility for attracting the bulls. Although exports are rising, they are not at the level they need to be with ending stocks at 2.1 BB. Last week, inspections were 52.7 MB and are slightly below the pace needed to meet USDA’s target of 2.150 BB. Long story short, corn faces some challenges unless weather is a factor in July.
Bean Outlook
Soybeans are in the same boat as corn as far as facing challenges, but possibly more so for the following reasons. Planting is winding down at 87 percent done with 72 percent of the crop rated in good-to-excellent condition. This compares to last year’s rating of 59 percent and the 10-year average of 69 percent. With the crop off to a strong start, unless the weather threatens production, exports will have to carry the load in attracting bullish interest. Right now, that is not happening. Last week, inspections were a paltry 8.4 MB with China only taking 124,000 bu. Since early November, the pace of shipments to them has fallen 98 percent. They are currently sourcing most of their needs from Brazil and that situation will continue to grow. During the past 3 years, Brazil’s exports have risen 10 percent while those of the U.S. have declined 8.5 percent. The bottom line is with global stocks at a record, soybeans face some serious challenges this season unless Mother Nature intervenes.
Wheat Outlook:
The nine-day freefall in wheat appears to have ended this week. What precipitated the decline was Turkey’s announcement that they are banning imports to protect their producers. Turkey is a large importer of wheat but most of their needs is sourced from Russia. Looking at U.S. exports, inspections for the first week of the marketing year were modest at 12.9 MB. However, they may improve as export estimates from Russia and Ukraine have been lowered. Meanwhile, winter wheat harvest is off to a quick start at 12 percent complete compared to 7 percent a year ago and 6 percent for the average. The bottom line is that with the cuts in Russia and Ukraine’s exports, and the decline in world stocks, the sell-off in wheat is probably exaggerated.
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