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Corn harvest is getting off to a slow start at 11 percent complete versus the average of 17 percent. However, no serious delays are expected as weather is favorable in most areas of the Corn Belt for the next 7 days. Early yield reports indicate that we are facing another large crop, but not as impressive as the record set in 2016. Meanwhile, South America will take a greater role in the weeks ahead as fewer corn acres are expected to be planted, while NOAA has increased the odds of a La Nina forming to 55-60 percent. In other developments, exports this season are sluggish with inspections last week at 29.0 MB. The funds are leaning more bearish as they increased their short position 60 MB to 785 MB. They will likely stay with their position until harvest is further along, or trouble brews in South America.
Soybeans lost their mojo recently as much needed showers are expected in Brazil later this week. Meanwhile, harvest in the U.S. is getting underway at 10 percent complete compared to the average of 12 percent. Early harvest yield reports are coming in better than expected. Exports remain impressive with inspections last week at 37.8 MB. China took 24.5 MB or 64 percent of shipments. Shipments will probably stay firm until November, then taper off as interest turns to South America. Meanwhile, the funds are becoming less bearish as they trimmed their shorts 75 MB last week to 145 MB. This was their third week of liquidation.
The labored rise in wheat futures the past few weeks has been much like a pro bass fisherman using a trolling motor on a flat bottom boat rather than a high-performance outboard! However, the bulls better not complain because the market is, at least, plodding higher. The factor supporting the market is hot, dry conditions in Australia that will likely reduce their production. Meanwhile, winter wheat planting is in full swing and 24 percent complete compared to the average of 28 percent. Looking at exports, they remain a sore spot with inspections last week 18.3 MB. While this is above the average needed to reach USDA’s target of 975 MB. The average pace of shipments has been declining since June. For now, managed money remains bearish as the funds are short 500 MB.
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