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Corn Outlook:
The focus in the grains remains on China, but an eye needs to be kept on Mexico as well, as they are the largest buyer of our corn. Last week, export inspections were 55.9 MB and below the average of 59.6 MB that must be shipped weekly to meet USDA’s projection of 3.075 BB. This caused a downtick in the overall pace of shipments. However, we are still on track to achieve USDA’s target. Meanwhile, last week, shipments to Mexico of 330,150 tons were the smallest since the first week of October. If shipments to them do not pick up in the next couple of weeks, it may be a sign that their interest is waning. The bottom line is if exports are peaking, the upside potential in corn could be limited. In other matters, weather in Brazil and Argentina is favorable for crop development.
Bean Outlook
There is skepticism that China may not buy the 12 million tons of soybeans agreed upon with the Trump Administration by the end of the year. Estimates are they have booked 3-4 million tons since signing the agreement. Although there are reports of ships being loaded in the Gulf and headed to China by mid-December, we need to see verification. Looking at exports, inspections last week of 33.8 MB were above the average of 30.7 MB that must be shipped weekly to meet USDA’s target of 1.635 BB. However, the pace has fallen 13.1 percent since the first week of November. Looking at Brazil, their planting is 85 percent done with some estimates of production at 178.1 million tons versus 175.0 million by the USDA. The bottom line is, if China does not fulfill their agreement, or weather does not become a factor in South America, current prices will be difficult to justify.
Wheat Outlook:
Wheat is currently the weak link in the grains as global stocks continue to rise. Recently, Australia increased their production estimate to 35.6 million tons from 33.8 million. Meanwhile, exports are offering little support as inspections last week at 14.1 MB were below the average of 15.9 MB that must be shipped weekly to meet USDA’s target of 900 MB. Currently, they are on track for 820 MB. In other matters, tensions between Ukraine and Russia have risen.
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