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After a slow start because of wet conditions a few weeks ago, great strides have been made in corn planting with 71 percent of the crop in the ground, one point above the average. However, because of a less than ideal situation, emergence lags five points behind the norm at 31 percent. Michigan and Minnesota are lagging the most at 13 and 12 percent below their average. With less than perfect conditions in the upper Midwest, record replanting expected in Illinois, problems are likely down the road. In the meantime, the bears remain in control as their short position has grown to 1.125 BB, 75 MB shy of the record. With the exits jam packed, it could create a dilemma should there be a mishap with Mother Nature. In other news, export inspections last week were vigorous at 54.9 MB and above the average needed to reach USDA’s projection of 2.050 BB.
Soybeans are meeting a headwind from a record crop in South America, and expectations that USDA’s acreage forecast of 89.5 million will grow. In addition, news of a corruption scandal involving Brazil’s President Temer broke Thursday that sent the real lower. This was all that it took to tip the scales and force the longs to bail. It lent pressure to corn and wheat as well. Last week, planting was on par with the average at 32 percent complete. Meanwhile, there are some areas lagging, such as Michigan, which is 14 percent behind their average. Looking at exports, they continue to slip with inspections posting a marketing year low for the second straight week at 10.3 MB. Since November, the pace has fallen 83 percent. In other developments, the funds liquidated 55 MB from their short position last week reducing it to 295 MB.
Since 1980, wheat acres in the U.S. have fallen nearly 50 percent. For 2017-18, they are expected to decline 4.1 million to 46.1 million acres. If prices stay at current levels much longer, a wheat planter might only be found in the museum next to the dinosaur and fossil exhibit! Looking at the crop ratings, they slipped 2 points last week to 51 percent in good-to-excellent condition. This compares to a rating of 62 percent a year ago. Last week, the funds lightened their shorts 70 MB reducing them to 685 MB. While Ukraine has had issues with dry conditions, and a cold snap in late April potentially damaged France’s crop, it has done little to the deter bears stance because of abundant global stocks.
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