On The Money Grain Commentary 10-16-14

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Corn Outlook:

Corn has held onto its gains longer than most traders anticipated following the crop report last week.  Offering support are soggy, wet conditions in the central and eastern Corn Belt that have  further delayed the harvest that is already lagging.  This has kept the bears at bay in pressing the market lower until weather improves.  Last week, only 24 percent of the corn crop was harvested versus the average of 43 percent.  Iowa and Minnesota are well behind running 29 percent and 25 percent, respectively, below their average.  Meanwhile, the harvest pace should pick up by the weekend as a dryer pattern is forecast into next week.  Export inspections for the week were 36.7 MB and above the average needed to reach USDA’s projection of 1.750 BB.  The trend following funds have lightened their longs by 85 MB reducing them to 20 MB.

Bean Outlook:

      The sell-off in soybeans has paused since the crop report because of the lagging harvest in the eastern Corn Belt caused by excessive rainfall.  Last week, 40 percent of the soybean crop had been cut compared to the average of 53 percent.  Iowa and Illinois are running 25 percent and 23 percent, respectively, behind their average.  Additional support stems from recent hot, dry conditions in northern Brazil that has raised concerns of replanting.  Their forecast is to remain hot for another week, which will stress newly planted soybeans.  Keep in mind that it is the time of the year when traders begin to focus on the crop in South America.  In other developments, export inspections were a marketing year high at 52.4 MB.  Since mid September, the trend following funds have been trimming back their record short position.  Last week, they reduced it 40 MB to 355 MB.  Be advised that the recent rebound in soybeans and corn is mostly technically inspired.

Wheat Outlook:

Wheat has risen recently as wet conditions in the eastern Corn Belt has slowed planting, and could result in fewer acres of soft red winter wheat if the planters are not rolling soon.  As of last week, Illinois and Michigan were running 26 percent and 12 percent, respectively, behind their average.  Nationwide, however, planting is on track at 68 percent complete versus the average of 67 percent.  Export inspections for the week were disappointing at 15.7 MB, and below the average needed to reach USDA’s target of 925 MB.  In other developments, the trend following funds have lightened their short position by 5 MB reducing it to 425 MB.

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