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It is a challenge to be friendly toward corn because of rising domestic and global stocks. Currently, global stockpiles are the third highest on record at 325.2 million tons. Although fewer acres are expected to be planted in the Midwest this spring, ending stocks of 2.162 BB will serve as a cushion in case of adverse weather. Meanwhile, the February Ag Outlook next month may offer some clues as to what producers might plant. Looking at exports, inspections last week were uneventful at 34.7 MB. They must average 47.0 MB each week for the remainder of the marketing year to meet USDA’s target of 2.1 BB. So far, this season, the highest weekly inspection has been 45.9 MB. The bottom line for corn is that it faces major hurdles considering the excessive supply and disappointing exports.
Soybeans face a headwind from the USDA not reducing Brazil’s production estimate as much as expected, global stocks that are at a near record level, and a slowing growth rate in China. Meanwhile, concerns about the weather in Brazil have passed as the funds have increased their short position to 255 MB. Looking at exports, they picked up last week as inspections exceeded the previous week at 46.4 MB. China took 25.5 MB, their largest shipment since late November. However, even though exports for the week saw an improvement, the pace has fallen 53.0 percent since early November while those to China have declined 72.6 percent.
Wheat has had a difficult time finding a direction as it is torn between increased hostilities in the Black and Red Seas, a stronger dollar, lackluster exports, and increased snow cover in the southern Plains. Meanwhile, USDA reducing their planting estimate last week has failed to offer much support. Looking at exports, following a dynamic shipment a couple of weeks ago, inspections last week were only nimble at 8.6 MB. They must average 17.1 MB for the remainder of the marketing year to reach USDA’s projection of 725 MB. We have only seen one week so far this season in which the average has been exceeded.
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