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Corn harvest has gotten off to a slow start this season at 18 percent complete compared to 10 percent a week ago and 23 percent for the average. Iowa, Minnesota and Nebraska are running 9 percent, 7 percent, and 6 percent behind their average. While scattered showers may slow progress over the next few days, the market does not seem too concerned. On Wednesday, the USDA projected corn stocks on September 1st at 1.731 BB, up from 1.232 BB a year ago. This was mostly in line with trade estimates. Exports this year are off to a sluggish start with inspections last week at 31.8 MB. We have to ship 36.2 MB each week to reach USDA’s target of 1.850 BB. For the past couple of weeks, the trend following funds have flipped flopped between a short and a long position. Currently, they are short a token 10 MB.
While corn harvest is lagging, soybeans are off to a fast clip at 21 percent complete compared to 7 percent a week ago and 16 percent for the average. Minnesota, Illinois, and Ohio are making tremendous progress running 14 and 12 percent above their average. In the quarterly stocks report this week, USDA projects soybean stocks on September 1st at 191 MB. This was less than traders had expected, but were above last year’s stocks of 92 MB. Export inspections last week were 19.4 MB and must average 34.8 MB each week to reach USDA’s target of 1.725 BB. While China announced last week that they would take up to 13.1 million tons of soybeans for 2015-16, and some recent sales have been made, the business has largely been factored into the market. Right now, the trend following funds are content being short as they added 85 MB to their position last week increasing it to 290 MB. This is their largest position since June.
Wheat has been underpinned the past couple of weeks from dry conditions in Russia and the Ukraine. However, sources there say that it is too soon to become alarmed. Winter wheat planting in the U.S. is running slightly behind schedule at 31 percent complete compared to the average of 35 percent. Exports have picked up recently with inspections last week at 23.9 MB. We have to ship 17.3 MB each week to reach USDA’s target of 900 MB. In the grain stocks report, USDA projected wheat stocks on September 1st at 2.089 BB, up from 1.907 BB a year ago . The trend following funds are bearish wheat, but lightened their shorts 30 MB last week reducing them to 390 MB. Short covering by them is about the only factor supporting the market.
being short as they added 85 MB to their position last week increasing it to 290 MB. This is their largest position since June.
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