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USDA has closed the book for the 2016 crop. Their production estimate for corn is 15.148 BB with ending stocks of 2.355 BB. This is based upon a yield of 174.6 bpa. World stockpiles fell 1.3 million tons to 221.2 million. Long story short, we have more than ample stocks to meet demand. In other developments, export inspections were routine at 25.0 MB and must average 44.3 MB each week to reach USDA’s projection of 2.225 BB. Meanwhile, the funds were active last week as they trimmed their short position 110 MB to 450 MB. Now that 2016 production is history, attention will focus on planting intentions for 2017.
USDA trimmed their production estimate for soybeans to 4.307 BB with ending stocks of 420 MB. This was based upon a yield of 52.1 bpa. Traders were expecting ending stocks closer to 468 MB. World stocks fell 600,000 tons to 82.3 million, but are still in oversupply. Argentina’s crop was left unchanged at 57.0 million tons, while Brazil’s crop rose 2.0 million tons to 104.0 million. While the report may have disappointed the bears, it is not give the bulls a lot of ammunition. Looking at exports, inspections were 58.0 MB and have fallen for the seventh week in a row. Meanwhile, the pace of shipments has declined 37 percent since peaking in November. China took 39.1 MB, which was the smallest shipment to them since September. In other developments, the funds reduced their long position 70 MB last week to 435 MB. This was their fifth week of liquidation.
USDA increased ending stocks of wheat 43 MB to 1.186 BB. World stockpiles grew 1.2 million tons to 253.2 million. The bright spot longer-term for wheat is that winter wheat acres fell 3.7 million from a year ago to 32.4 million. However, the bulls must keep in perspective that it will take time to work off the oversupply. Export inspections were mediocre last week at 14.5 MB and below the average needed to reach USDA’s projection of 975 MB. For the second straight week, the funds whittled on their shorts reducing them 50 MB to 575 MB.
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