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Attention in the grains is turning more to the rising tensions between Russian and Ukraine. Ukraine’s president is trying to downplay the situation, and the U.S.’s attempt to get involved by putting 8,500 troops on alert for a possible deployment to eastern Europe, as well as implementation of sanctions. Apparently, we have not yet learned the lesson that when you step in to break up a fight, you are the one that usually gets punched in the face! In other matters, interest will be on the crop report next month and the Ag Outlook Forum which will offer a glimpse into what we might expect this season. Looking at exports, corn inspections last week were below the previous week at 47.6 MB. Since mid-November the pace of shipments has been growing, but we must ship 55.5 MB on a weekly basis to reach USDA’s target of 2.425 BB which is a tall order.
Showers in southern Brazil have helped to alleviate dry conditions in some areas, but not in others. Soybean yields in Rio Grande do Sul are expected to be down from estimates earlier this month. Meanwhile, soybean harvest has begun in Mato Grossa and is 13 percent complete with generally good yields being reported depending upon the location. Looking at exports, inspections last week were 47.6 MB with China taking 23.5 MB. Since early November, the pace of shipments has fallen 45 percent with shipments to China declining 50 percent. This suggests that after weather in South America is no longer a factor, the bulls will need fresh news to keep prices on the upswing.
All eyes are on the tensions between Russia and Ukraine, and the possible impact it could have on wheat if a conflict arises. Russia is the world’s second largest exporter of wheat with Ukraine the fourth. If the conflict worsens, it could possibly swing some business to the U.S., but probably most would go to the EU and Australia. Looking at U.S. exports, inspections last week were 14.7 MB and must average 18.8 MB to reach USDA’s projection of 825 MB. Exports of over 18.0 MB have not been seen since late September.
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