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Grain producers are in a hurry to park the combines in the shed. Last week, they ran at breakneck speed and harvested 19 percent of the corn crop putting it at 60 percent complete compared to 43 percent for the average. Once it is done, the bin doors will be shut with producers holding for higher values. Factors supporting the market are expectations that China will purchase up to 30 million tons, possibly 24 million from the U.S. While that may come, the USDA has left China’s imports unchanged at 7.0 million tons. Last week, export inspections were modest at 35.8 MB and must average 46.8 MB each week to achieve USDA’s target of 2.3 BB. For their projection to be reached, China will have to step up to the plate.
Soybean futures continue to trend upward from optimism surrounding China and slow planting progress in Brazil. Although China continues to be an active buyer of U.S. soybeans, their interest may dwindle later next month when Brazil is further along in planting. Recent showers, and more in the forecast the next couple of weeks should facilitate planting progress. Looking at exports, inspections last week at 79.8 MB were a marketing year high for the second consecutive week. China took 64.0 MB, or 80 percent of shipments. However, as mentioned in previous comments, unless a production threat arises in South America, exports tend to peak in November. In other developments, harvest is progressing at a rapid pace and is 75 percent done versus the average of 58 percent. Right now, with the market at an inverse relationship, there is little incentive to store this fall and winter.
Wheat continues to trend upward from concerns of dryness in the southern Plains and Russia. However, with the forecast for record global stocks, one good shower could cause values to tumble. Right now, some scattered showers are in the forecast. In other developments, winter wheat planting is running slightly ahead of schedule at 77 percent complete compared to the average of 72 percent. Export inspections last week were a bust, a marketing year low of 8.8 MB. We must average shipments of 18.2 MB per week to reach USDA’s target of 975 MB. Currently, shipments are on track for 968 MB.
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