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It will not be long until spring rolls around. With global stocks the tightest since 2016, weather and planting estimates will be the focus in the weeks ahead. However, that is the case every year. The long-range forecast through April is for normal to above normal rainfall in the Midwest and drier conditions in the Plains. Both the bulls and bears will interpret what they want from this forecast. Regarding corn planting, Informa Economics projects a 3.4 million acre increase to 94.2 million. This would be the largest acreage since 2016. In other developments, the export pace has risen the past 10 weeks with inspections last week a marketing year high of 54.7 MB. We must ship 58.4 MB each week to reach USDA’s target of 2.550 BB. While the fundamentals of corn are improving from recent purchases by China, there are bumps in the road ahead. The dollar is showing signs of a major bottom, the funds are long over 2.0 BB, and friction may arise from China’s meddling with Taiwan.
As we go into February, the focus in South America shifts to soybean harvest, yield reports, and less on weather. Here in the U.S., spring planting intentions will come into light. Next month, the USDA Ag Outlook Forum will share their view on 2021 planting. In the meantime, Informa Economics forecasts 90.1 million acres of soybeans, an increase of 7.0 million from 2020. This would be the third largest on record. In other developments, export inspections last week were strong at 72.7 MB, and are up 8.0 percent the past couple of weeks. However, overall shipments are down 24.5 percent since peaking in mid-November. China took 44.8 MB last week with their pace rising 3 straight weeks. However, the overall pace has fallen 34.8 percent since early November. Meanwhile, the honeymoon with soybeans will likely continue a while longer as the funds are long 725 MB with the record being 1.125 BB set in May of 2012.
Wheat is mostly a follower of corn and soybeans and that will likely continue until the crop comes out of dormancy. Russia imposing an export tax may swing business to the U.S. However, the dollar showing signs of forging a major bottom could be a limiting factor. Export inspections last week were an improvement at 19.2 MB. Meanwhile, we must ship 21.8 MB each week to reach USDA’s projection of 985 MB. This is a tall order as only 5 times this marketing year have exports exceeded this level.
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