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Corn Outlook:
The Supreme Court striking down President Trump’s tariff policy as illegal, and his counter measure of imposing a 15 percent global tariff has everyone wondering what happens next. This could give our trading partners more leverage in renegotiation of their agreements. My thinking is that politics involved in the grain trade does not make for good bed fellows. Looking at corn, the export pace has declined since late January but picked up last week with inspections of 78.9 MB, a marketing year high. For USDA’s projection of 3.3 BB to be met, 67.1 MB must be shipped on a weekly basis, which may be optimistic if the dollar continues to recover. Currently, we are on track for shipments of 3.0 BB. The bottom line is that additional gains could be limited unless planted acres this spring are less than USDA’s outlook forum estimate of 94.0 million.
Bean Outlook
Bullish sentiment in soybeans is soaring from hope of China making additional purchases from the U.S. even though Brazil is much cheaper. This is evident from the long fund position rising to 575 MB, the largest since January 2023. However, the bulls may be painting themselves into a corner as the Supreme Court striking down President Trump’s tariff policy gives China greater negotiating leverage when he and President Xi meet in April. Also, Trump carries a smaller stick for bargaining. Meanwhile, exports have been slipping this month with inspections last week only 24.6 MB, the smallest shipment since late September. China took 12.6 MB, their smallest delivery since late December. The bottom line is it is uneconomical for China to purchase U.S. soybeans unless considerable political favors from Trump are involved.
Wheat Outlook:
There is not much fresh news in wheat other than it is being supported from fund short covering and continued unrest between Ukraine and Russia. Since early January, the funds have reduced their short position from 550 MB to 390 MB last week. Meanwhile, exports have improved since mid-January with inspections last week at 19.6 MB. This was above the average of 16.4 MB that must be shipped weekly to meet USDA’s target of 900 MB. Currently, we are on track to reach their projection.
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