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Grain producers are beginning to sharpen their pencils, check input costs, and evaluate what they intend to plant this spring. Currently, the profit potential is not very promising for corn, but that is subject to change. While weather will be on everyone’s radar, the political climate must be taken into consideration as well because of partisan politics and global uncertainty. Meanwhile, global stocks of corn are declining, but remain abundant. Exports have improved with inspections last week at 33.3 MB. The pace of shipments has risen 44 percent since November, but are still short in reaching USDA’s projection of 1.925 BB. Looking at the funds, they have trimmed their short position to 1.160 BB. Right now, fund short covering is the most supportive factor for corn.
Soybeans met a headwind this week as weather is mostly beneficial in Brazil and starting to improve in Argentina. Scattered showers are forecast to develop in some of the drier sections of Argentina this weekend, which has inspired the bears. Looking at exports, inspections last week were 43.4 MB. Since November, the pace of shipments has fallen eight consecutive weeks for a decline of 44 percent. China took 29.7 MB which was a modest uptick from the previous week. Meanwhile, the funds remain bearish as they increased their shorts for the third straight week to 525 MB. This is the longest they have gone the past several weeks without flip-flopping.
Moderating temperatures in the Midwest and southern Plains following the Artic conditions last week has weighed on wheat. Right now, the question is how extensive is the damage? That will not be known for several weeks. Meanwhile, export inspections were the second lowest of the season at 8.6 MB, which resulted in the first downtick in the pace of shipments since early November. Looking at the funds, they trimmed their short position 65 MB reducing it to 730 MB. This was their third consecutive week of liquidation.
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