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Trade tensions between the U.S. and China have eased for now with the Trump Administration saying that farmers will be protected. Meanwhile, traders are returning their focus to weather, planting, and exports. Cool, wet conditions have plagued fieldwork this spring, but a warming trend is forecast. However, producers will have to dodge rain drops to get the corn crop planted. Currently, it is 2 percent complete. With world stocks down 14.3 percent from a year ago, weather could become a factor. Exports have been rising the past several weeks as the U.S. is competitive in the world market. Inspections last week were a marketing year high of 76.2 MB. Looking at the funds, they are long 840 MB and have room for their position to grow.
Soybeans are being supported on ideas that they might dodge the bullet in a trade war with China. Keep in mind that China is currently sourcing South America’s soybeans and will have little interest in U.S. origin until late summer. They cannot shun the U.S. completely and expect to feed their livestock industry. They need U.S. soybeans! Meanwhile, Argentina purchased 120,000 tons of our soybeans this week which reflects the seriousness of their drought. In other developments, global stocks have declined 6.1 percent from a year ago but remain abundant. Looking at exports, inspections last week were a marketing year low of 13.7 MB. The funds have been accumulating a long position since February that currently stands at 720 MB.
Wheat has emerged from the ashes as deteriorating conditions in the southern Plains are starting to get attention, plus spring wheat planting is off to a slow start at 2 percent complete. Last week, the crop rating fell 2 points to 30 percent in good-to-excellent condition, the lowest rating since 1996. While this is supportive and caused the funds to cover shorts, price gains may be limited as world stocks have swollen 6.5 percent above a year ago. Looking at exports, the U.S. remains noncompetitive with the Black Sea region. Inspections last week were mundane at 15.8 MB and show little sign of life.
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