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News in corn is mostly uneventful with the focus being on harvest, yield reports, and weather in South America as planting there will soon get underway. Right now, harvest is lagging at 7 percent complete compared to the average of 11 percent. While yields are impressive in some areas, they are disappointing in others. Showers may delay harvest in the western Corn Belt over the next week, but conditions are favorable in the east. For the moment, there seem to be few concerns among the speculative crowd, as the funds increased their shorts to 725 MB last week, their largest position since June. Looking at exports, they are off to a slow start this season with inspections last week at 26.6 MB.
Soybeans are being underpinned from strong exports and dry conditions in Brazil delaying planting. Concerns are rising from NOAA increasing the odds to 55-60 percent of La Nina forming, meaning drier conditions could impact the growing season in South America. Meanwhile, exports are off to a strong start this season with inspections last week at 34.1 MB. China’s appetite for soybeans is growing as they took 25.4 MB, or 74 percent of shipments. Looking at the funds, they are trimming back their shorts reducing them last week to 220 MB.
Wheat is slowly trudging higher, but lacks conviction. This is largely because world stocks are at a record level and exports are sluggish. Since June, exports have been declining and fallen 31 percent. This is mostly because shipments from Russia have risen 4.7 million tons. Inspections last week were 17.0 MB and below the average needed to reach USDA’s projection of 975 MB. Meanwhile, winter wheat planting is 13 percent complete compared to the average of 15 percent. Looking at the funds, they are short 500 MB, down 25 MB from last week. Right now, they need a catalyst that forces them to cover.
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