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Corn Outlook:
Trading in the grains continues to be erratic because of President Trump postponing the summit meeting with President Xi of China, and the disruption of shipping in the Strait of Hormuz. The intensifying of attacks by Iran on oil and gas facilities raises concerns about the availability of fertilizer, fuel, and other products that are shipped through that region which is supporting corn. Meanwhile, private sources in Brazil have lowered their production estimate for corn 2.0 million tons to 133.0 million because of dryness in the southern section. Exports inspections rebounded to 65.3 MB last week but were below the average of 67.1 MB that must be shipped weekly to meet USDA’s projection of 3.3 BB. We are currently on track to achieve their target, but barely. Keep in mind that exports generally peak during the March-May period.
Bean Outlook
The rafters were certainly rattled in soybeans early this week from President Trump’s comment of a delay in the meeting with President Xi of China until late April. For weeks, the market had risen on hope of a trade deal being made in which China would purchase 8 million tons of soybeans. Optimism of a potential agreement led to the funds building a long position of 680 MB, their largest in over 3 years. The fact of Brazil sporting a record crop and being cheaper than the U.S. was largely ignored. The bottom line is the market rallied more on the whim of a bird in the bush rather than one in the hand. Meanwhile, looking at exports, inspections last week were 35.4 MB with China taking shipments of 20.0 MB. Since early February, our overall pace of shipments has fallen 33.6 percent.
Wheat Outlook:
Wheat is mostly following corn and soybeans but face issues from the weather swings in the Plains, and dry issues in the Black Sea area. Meanwhile, export inspections of 12.6 MB last week were disappointing and below the average of 16.7 MB that must be shipped weekly to meet USDA’s target of 900 MB. Currently, shipments are running slightly below the pace for it being met. Right now, the U.S. is the most expensive source on the planet because of the rising dollar.
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