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Corn harvest in the eastern Corn Belt has gotten behind the eight-ball because of wet conditions, which offered support this week. As of last week, only 31 percent of the crop had been cut compared to the average of 53 percent. A mere 7 percent of the crop was harvested last week. Keep in mind that big crops take longer to harvest and high moisture corn longer to dry down. Meanwhile, progress should pick up speed as the next 5-7 days has little rain in the forecast. In other developments, export inspections were less than expected at 28.2 MB and below the average needed to reach USDA’s projection of 1.750 BB. The trend following funds beefed up their longs last week increasing them 110 MB to 130 MB. Over the next few weeks, traders will remain focused on harvest then concentrate on demand and weather in South America.
Soybean harvest has gotten off to a slow start, which underpinned the market this week. As of last week, 53 percent of the crop had been harvested compared to the average of 66 percent. Michigan and Indiana are behind the most at 37 percent and 31 percent below their average. Conditions have been hot and dry in northern Brazil, but recent showers should help relieve stress to early planted soybeans. Export inspections set a marketing year high for the second week in a row at 73.1 MB. China took 49.0 MB or 67 percent of shipments. USDA’s projection for exports this year are 1.7 BB and will likely be raised if the current pace continues. In other developments, the trend following funds lightened their short position 50 MB last week reducing it to 305 MB. The strength in the market this week attests to the fact that one should never underestimate the power of short covering by the funds, even when the fundamentals are bearish.
Wheat futures have been trending upward since late September as the trend following funds have been liquidating their short position that stood at 450 MB a few weeks ago. Last week, they shaved 45 MB from their shorts reducing them to 380 MB. Nationwide, wheat planting is 76 percent complete compared to the average of 77 percent. However, the east lags because of wet conditions with Illinois and Indiana 37 percent and 20 percent behind their average. This could result in fewer acres of soft red winter wheat being planted. In other developments, export inspections were 17.7 MB, slightly above the average needed to reach USDA’s projection of 925 MB. However, the pace of shipments peaked in early September and, if the trend continues, could threaten USDA’s target.
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