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The corn crop keeps getting bigger. That has been the case since USDA took their first field survey in August. In the just released November Crop Report, USDA increased their yield estimate for corn 3.6 bpa to 175.4 bpa. Ending stocks for 2017-18 rose 147 MB to 2.487 BB, while world stocks grew 3.9 million tons to 203.9 million tons. However, world stocks are down 10.0 percent from a year ago. In other developments, export inspections were the second lowest of the season at 17.5 MB with cumulative shipments trailing last year by 42 percent. Harvest is going to be drawn out, especially in the northern sections, as it is 70 percent complete versus the average of 83 percent. Looking at the funds, they increased their shorts 100 MB last week to 1.170 BB. This is a record position for November, but the report suggests they may not be in a hurry to cover.
In soybeans, traders were looking for a friendly report, but that is not exactly what they got. USDA left their yield estimate unchanged at 49.5 bpa. The trade was expecting a reduction to 49.2 bpa. However, ending stocks for 2017-18 slipped 5 MB to 425 MB. World stocks, on the other hand, rose 1.8 million tons to 97.9 million. This is 1.6 percent higher than a year ago. In other developments, exports continue to sizzle with inspections last week at 91.5 MB. China took 68.0 MB or 74 percent of shipments. However, be aware that exports will taper off once China turns their focus to South America’s crop. Looking at the funds, they added 25 MB to their long position last week increasing it to 35 MB. There is room for them to add to it, but unless a weather issue emerges in South America, the crop report will likely cause them to have second thoughts.
A plentiful supply of wheat continues to overhang the market even though the USDA did lower their ending stocks estimate for 2017-18 25 MB to 935 MB. World stocks fell 600,000 tons to 267.5 million. However, this is 4.6 percent more than a year ago and reflects the abundance. In other developments, exports remain a sore spot with inspections last week only 10.4 MB. Cumulative shipments this season are running 6 percent behind last year. Winter wheat planting is wrapping up at 91 percent done with 55 percent of the crop rated in good-to-excellent condition versus the average of 58 percent. Looking at the funds, they are entrenched in their bearish stance as they added 155 MB to their short position increasing it to 660 MB.
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