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A sense of calm has returned to the grain and financial markets following the volatility created last week by the surprise election of Donald Trump as the 45th President. Right now, traders are interested in his cabinet appointments, and the impact that they will have on the economy and foreign relations. Most believe that his agenda will be positive to the economy. In the meantime, attention is returning to ag trade, planting intentions next spring, and weather in South America. While corn exports are still running ahead of a year ago, shipments have fallen 48 percent since September with inspections last week a modest 24.3 MB. The four percent rise in the dollar recently will cut into them even more. Looking at the funds, they cut their short position 170 MB to 95 MB. This was their sixth week of liquidation.
Soybean exports to China remain red hot, but prices are struggling to capitalize. Maybe, it is because of the strength in the dollar, or knowing that once the crop in South America is planted, the other shoe will drop. Currently, planting in Brazil is 63 percent complete. In the meantime, exports continue to sizzle with inspections last week at 102.3 MB. China took 85.7 MB or 83 percent of shipments. However, when their buying interest fades in favor of Brazilian soybeans, it could be like shutting off the water spigot. As I have mentioned in previous comments, when exports peak, they fall, on average, 83 percent before the marketing year ends. As far as the funds go, they increased their longs 70 MB last week to 580 MB. This is the largest position that they have held since July.
Wheat is struggling, and the strength in the dollar is not helping. With world stocks their highest in 30 years, a stronger dollar will further inhibit U.S. exports. This was seen last week with inspections last week a marketing year low of 7.0 MB. Meanwhile, the rating for wheat improved one point last week to 59 percent of the crop in good-to-excellent condition. This compares to a rating of 52 percent a year ago. Regarding the funds, they added 30 MB to their short position last week increasing it to 680 MB.
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