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Following the crop report next week, the focus in the grains will turn to planting scenarios for 2024 and long-range weather forecasts. However, we cannot take our eye off on what might be brewing with China. With the lack of leadership and political divide in Washington, along with the decline in our military readiness, China could view this as a prime opportunity for the reunification of Taiwan ahead of the November election. If they do, it will create a tailspin in the financial as well as the ag markets. Meanwhile, looking at corn, the export pace has been rising since late November, but has possibly peaked. Last week, inspections were below the previous week at 22.2 MB and must average 46.5 MB each week to meet USDA’s target of 2.1 BB. So far this season, we have not seen a shipment this high which creates a bleak picture for their projection.
Soybeans took a solid punch to the chin this week as widespread showers over the weekend in Brazil, and more in the forecast, caused them to tumble. If concerns about Brazil’s weather and production have passed, exports will have to pick up and carry the ball. However, that may be easier said than done. Last week, export inspections were below the previous week at 35.3 MB with China taking 17.3 MB. Meanwhile, since peaking in early November, the overall export pace has fallen 47.5 percent while shipments to China have declined 74.2 percent. That said, with weather having most likely run its course, and exports that are on the decline, some other catalyst will be needed to draw the bulls’ attention.
Wheat has held up better than corn and soybeans, but the rebound in the dollar, and the wintry forecast for the southern Plains may act as a headwind. Meanwhile, exports remain sluggish with inspections last week of only 10.0 MB. They must average 16.8 MB each week for the rest of the marketing year to reach USDA’s projection of 725 MB. So far, this season, we have not seen a shipment this high which does not bode well for their target being met.
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