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The welcome mat is beginning to wear thin for the bulls playing the weather card in Argentina. Showers over the past weekend, and more in the forecast will help stabilize the crop. That said, demand will come into greater focus. Currently, corn has a problem of lackluster demand. For instance, the number of cattle on feed is down 3 percent from a year ago while placements are 8 percent lower. Meanwhile, pig numbers are down 2 percent. Exports are struggling with inspections below the previous week at 28.6 MB. They must average 45.9 MB on a weekly basis to reach USDA’s projection of 1.925 BB. So far, there has not been a shipment that high for the season. This suggests that further reductions are likely. The bottom line is that corn needs a jumpstart, but where it comes from is anyone’s guess.
Soybeans are facing a similar situation to corn in that recent showers in Argentina have stabilized the crop. Meanwhile, record production is forecast in Brazil which will help offset some of their losses. Looking at exports, inspections last week were below the previous week at 66.3 MB with China taking 43.9 MB. However, the average pace of shipments to China has risen the past two weeks. While this offers a bit of encouragement, keep in mind that U.S. exports are forecast to decline 55 MB, the second reduction in two years, but Brazil’s exports are projected to rise 1.0 million tons, just shy of their record in 2019.
Wheat faces a headwind from snow received in the southern Plains recently, shabby exports, and a record crop forecast in Russia. Last week, export inspections were slightly higher than the previous week at 12.2 MB, but well below the average of 15.3 MB that must be shipped each week to reach USDA’s target of 775 MB. Right now, the pace of shipments is running approximately 130 MB below their projection.
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