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Corn Outlook:
There are no winners in a trade war, only losers. Tensions between the U.S. and China are heating up, and the question is whether the meeting scheduled at the end of the month between Trump and Xi will be held. Meanwhile, with the crop reports on hold because of the shutdown, the corn yield remains a mystery. Private sources put the yield between 185.9-181.0 bpa compared to the USDA at 179.3 bpa. Even if the harvest yield is near the lower estimate, ending stocks will still be excessive at 2.0 BB. Looking at exports, following the marketing year high made a couple of weeks ago, inspections were a marketing year low of 44.4 MB last week, and below the average of 57.8 MB that must be shipped weekly to meet USDA’s target of 2.975 BB. Shipments to Mexico of 299,156 million tons were the lowest since June and raises the question of whether their interest has peaked. If so, support will diminish.
Bean Outlook
While some are holding onto hope that a trade deal with China will eventually be struck that includes soybeans, it is not very encouraging as tensions are escalating. In September, China’s imports from Brazil were a record 12.8 million tons. Meanwhile, China has not taken a shipment from the U.S. since June. Conab, in their last estimate, forecasts Brazil’s production rising to 177.6 million tons compared to 175.0 million for the USDA. With production and exports in Brazil on the upswing, China may only have an interest in the U.S. if a shortfall arises in South America. Right now, they seem to be holding all the cards. Looking at exports, inspections last week were a marketing year high of 36.5 MB and above the average of 33.4 MB that must be shipped weekly to meet USDA’s target of 1.685 BB. However, cumulative shipments are down 26 percent from a year ago and are on track for only 1.350 BB.
Wheat Outlook:
There are not many shining stars to be found in wheat. The one exception is exports, which have been impressive, so far, this season. However, competition will be intense from our competitors. Last week, export inspections were 16.3 MB and above the average of 15.3 MB that must be shipped weekly to meet USDA’s projection of 900 MB. While we are on track for their target to be met, the pace has fallen 13 percent since mid-September.
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