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Corn Outlook:
Corn futures have been supported this week from dryness that persists in central Brazil, the lowering of interest rates by the Fed last week, and the threat of a port strike at the East and Gulf port facilities. The lowering of interest rates is friendly to commodities but could have inflationary consequences if Congress does not cut spending. Meanwhile, the threat of a port strike offers short-term support, but, longer-term, could swing business to South America if it develops. Looking at exports, inspections last week were a marketing year high of 43.4 MB and must average 45.2 MB each week to meet USDA’s target of 2.3 BB. We are only 3 weeks into the marketing year and the pace of shipments is the best seen since 2017. The bottom line in corn is that demand is slowly improving, but we have a long way to go in working through the heavy supply.
Bean Outlook
Dry conditions in central Brazil are supporting soybeans, but it may be short lived as their wet season begins in October. Furthermore, China’s economy is struggling which could diminish their imports. Last week, export inspections were 17.8 MB and must average 36.8 MB each week to reach USDA’s projection of 1.850 BB. We are early in the marketing year, and our pace of shipments is only average, at best. However, chances are they will improve as China’s interest usually does not peak until November. Meanwhile, Brazil will continue to be their primary source of origin. The bottom line in soybeans is that world stocks are rising, and the upside looks limited unless a serious production threat arises in South America.
Wheat Outlook:
Wheat is being supported from dry conditions in Australia, Argentina, and the Black Sea Region. This is giving our exports a boost as inspections last week were a marketing year high of 26.1 MB, and well above the average of 15.0 MB that must be shipped weekly to meet USDA’s target of 825 MB. The dollar has been weaker this month which has also supported. Meanwhile, the planting of the winter wheat crop is progressing without delay and is 25 percent complete compared to 23 percent a year ago and 24 percent for the average. The bottom line in wheat is that world stocks are declining, and the price outlook shows signs of improving.
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