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Corn Outlook:
Hot, dry weather in the upper Midwest, and massive short covering by the funds has been the force driving the grains higher creating extreme bullish enthusiasm. Spring wheat reaching the $8 mark has been the catalyst fueling the rally. One comment read while surfing the internet early this week is that it is time for producers to weld the grain bin door shut. The super sleuth Charlie Chan might say, “make sure that you are not on inside when done!” Last week, the funds were short 750 MB, but are in the process of unloading their position. The rating for corn improved one point last week to 68 percent of the crop in good-to-excellent condition, and is on par with the 10-year average. Looking at exports, they were respectable at 43.0 MB and above the average needed to reach USDA’s projection of 2.225 BB.
Bean Outlook:
Record soybean stocks are available in South America, as well as expectations for the largest crop planted in the U.S. However, inflammatory conditions in the upper Midwest has sparked price gains of nearly 10 percent in less than two weeks. Be aware that the strength has come from the funds who were caught short and are blowing out of a record position that stood at 735 MB last week. Mind you there is no global shortage of soybeans. However, you do not want to stand in the middle of the track when a train is barreling your way. Last week, the crop rating fell 2 points to 64 percent in good-to-excellent condition, and is on par with the 10-year average. Looking at exports, inspections last week were a marketing year low at 9.7 MB.
Wheat Outlook:
Although global ending stocks of wheat are at a record level, spring wheat is the factor keeping winter wheat afloat. Last week, the funds were short 315 MB, but have probably liquidated most of those positions by now. The rating for spring wheat fell 3 points last week to 37 percent of the crop in good-to-excellent condition, and compares to 72 percent a year ago. Meanwhile, winter wheat harvest is running one point below its average at 53 percent complete. In other developments, export inspections were a nonevent at 18.5 MB.
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