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Beef, it’s what’s for dinner! Bears are having a feast! This week, corn values slid to their lowest level in seven years with the prospect of a bin busting crop. As it stands now, this will be one of the best crops seen if Mother Nature cooperates through harvest. Last week, the crop rating for corn remained unchanged at 75 percent in good-to-excellent condition and compares to 68 percent a year ago and 59 percent for the ten-year average. According to Ag Watch’s yield model, this equates to a national yield of 173.2 bpa. The funds are becoming bolder as they increased their short position 50 MB to 740 MB. This is their largest short position since April, and their biggest short during August since 2013. Looking at other developments, export inspections were solid at 55.9 MB. With a record crop on the horizon, brisk demand is essential.
Soybeans are caught in a tug of war in that solid exports are pulling against a potential record crop. Over the past week, a highly anticipated bumper crop has given the bears the upper hand. Giving them another bone was a one-point improvement in the ratings to 73 percent in good-to-excellent condition, a record for this time of the year. According to Ag Watch’s yield model, this translates to a national yield of 50.3 bpa. Meanwhile, the funds are currently holding a long position that rose 85 MB last week to 555 MB. With a record crop in the making, and prices falling nearly 8 percent since last week, they are no doubt feeling some heat. Looking at exports, inspections last week were 33.8 MB with China taking 23.2 MB or 68 percent of shipments. This was the largest shipment to them since early July. However, for now, demand is trumped by expectations for a huge crop.
Wheat is struggling as it faces strong export competition from the Black Sea region amid an abundance of global stocks. Export inspections last week were 18.8 MB and above the average needed to reach USDA’s target of 950 MB. However, the pace of shipments has declined for the third straight week reflecting the competitiveness in the global market. Meanwhile, spring wheat harvest is winding down at 81 percent done, which is well ahead of the average of 62 percent. The funds maintain their bearish stance increasing their short position 15 MB to 620 MB. This is 145 MB short of the record of 765 MB.
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