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The bulls are looking for signs of encouragement in corn but will have to be patient. While global and domestic stocks are peaking, they remain abundant. Harvest is behind schedule at 17 percent complete versus the average of 26 percent. There may be a few disruptions this weekend, but drier conditions are forecast next week. Meanwhile, some private sources are raising their yield estimates ahead of next week’s crop report. As far as exports are concerned, inspections last week were 30.7 MB and below the average needed to reach USDA’s projection of 1.850 BB. While it is early in the season, shipments are well behind their target. Looking at the funds, they see little reason to abandon their shorts in corn and have increased them to 800 MB.
Much needed rainfall in Brazil recently kept soybeans on the defensive until Tuesday. Prices have since turned up on expectations of strong Chinese demand when they return from their holiday. Meanwhile, harvest in the U.S. is 22 percent done, which is slightly behind last year’s pace of 24 percent and 26 percent for the average. Like corn, some private sources are bumping up their yield estimate for soybeans in next week’s crop report. Export inspections were 32.8 MB and below the average needed to reach USDA’s target of 2.250 BB. China took 17.5 MB or 53 percent of shipments. This is down from shipments of 24.5 MB taken by them last week. Meanwhile, the funds are reining in their shorts as they trimmed them 55 MB to 90 MB. This was their fourth week of liquidation.
There is not much fresh news in wheat. Recent showers in Australia have improved conditions, which has likely precipitated the current break in values. Planting of winter wheat in the U.S. is behind schedule at 36 percent complete compared to 41 percent last year and 43 percent for the average. Meanwhile, exports have seen some improvement with inspections last week at 25.4 MB. Shipments have been lagging the past few weeks, but may be starting to pick up. In the meantime, the funds have trimmed their short position 30 MB to 470 MB. This is the first time since July that they have not added to their shorts. Maybe the bulls are finally seeing a ray of sunshine!
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