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Our first peak at USDA’s forecast for 2018-19 shows ending stocks of corn at 1.682 BB, down 500 MB from a year ago. World stocks are projected at 159.2 million tons, a six-year low. This was well below the trade estimate and gives the bulls fodder that supplies are headed in the right direction. In other developments, great strides were made in planting last week as 39 percent of the crop is in the ground, just below the average of 44 percent. However, Minnesota is lagging at 35 percent behind their average. Exports were sensational at 75.4 MB, the second highest of the season. Right now, the length of the fund long position is a concern as it has risen to 1.105 BB. This just behind the record for May set in 2011 at 1.365 BB. The magnitude of their position reflects that a great deal of positive news has already been factored into values.
USDA’s first ending stocks estimate for soybeans in 2018-19 was better than expected at 415 MB. This is 115 MB below a year ago. World stocks fell 5.9 percent to 86.7 million tons which was more than anticipate. The report gives the bulls a glimmer of hope. Looking at planting, it is progressing ahead of schedule at 15 percent complete versus 13 percent for the average. Minnesota, however, is struggling at 17 percent behind their average. Exports have improved the past couple of weeks with inspections last week at 19.6 MB. Because of the threat of an import tariff, China is not a player. Last week, the funds boosted their long position 55 MB to 745 MB.
The first look for USDA’s 2018-19 ending stocks estimate for wheat is 955 MB, a decline of 115 MB from a year ago. World stocks are projected to fall 2.3 percent to 264.3 million tons. Winter wheat production is forecast at 1.192 BB, down 77 MB while hard red wheat is expected to slide 103 MB to 647 MB. While the crop rating improved one point to 34 percent in good-to-excellent condition, it is behind in development at 33 percent headed versus the average of 41 percent. Meanwhile, spring wheat planting is crawling at a snail’s pace at 10 percent done compared to the average of 36 percent. Export inspections were a nonevent at 12.0 MB. Last week, the funds lightened their short position 120 MB reducing it to 235 MB.
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