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Corn Outlook:
The negotiations between the U.S. and Iran have failed, and future talks may be slow to develop because of each sides demands. Currently, the Strait of Hormuz remains closed which has rallied crude oil and supported the grains. Meanwhile, corn planting is proceeding at a rapid pace at 25 percent complete compared to 22 percent a year ago and 19 percent for the average. Export inspections last week were 64.7 MB and below the average of 66.4 MB that must be shipped weekly to meet USDA’s projection of 3.3 BB. While exports have been strong for the season, that may be changing as the pace has fallen in the past couple of weeks. Usually, exports tend to peak by May. Furthermore, Argentina’s production has been raised 6.0 million tons, while Brazil is a cheaper source than the U.S. With abundant ending stocks, unless weather becomes a factor impacting yields this growing season, these issues could limit price gains.
Bean Outlook
Soybeans appear to be marking time until we are closer to the scheduled meeting in mid-May between President Trump and Xi of China. Traders are hopeful of China making additional purchases from the U.S. which has enticed the funds in building a large, long position. However, a cloud overhangs this happening because of the closure of the Strait of Hormuz impacting Iranian exports of oil to China. Furthermore, Brazil is sporting a record crop, and a cheaper source than the U.S. Meanwhile, planting is off to a fast start at 23 percent complete compared to 17 percent a year ago and 12 percent for the average. Right now, the question for the bulls is, what happens if China agrees to only a modest purchase, or none at all?
Wheat Outlook:
Deterioration from dry conditions in the southern Plains and dryness in Australia has been the factor rallying wheat. Last week, the crop rating was unchanged at 30 percent of the crop in the good-to-excellent category compared to 49 percent a year ago. Although rain is forecast, most believe that any improvement will be minimal and may be too late. Meanwhile, exports are lethargic with inspections last week of 13.4 MB. We must ship 24.2 MB each week for the rest of the season for USDA’s target of 900 MB to be met. Right now, shipments are on track for 860 MB. Meanwhile, for now, the concern is the decline in crop conditions.
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