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Corn Outlook:
Corn has been supported recently from strength in soybeans, along with solid exports. However, some cracks are beginning to show in the export pace. Although export inspections last week were above the previous week at 51.8 MB, they remained below the average of 57.9 MB that must be shipped weekly to meet USDA’s target of 2.975 BB. Also, the pace has fallen 6.5 percent since the first week of October and is on track for shipments of 2.835 BB this season. In other developments, harvest should be about 59 percent complete with only a few areas experiencing some minor delays. Weather in Brazil and Argentina is favorable for planting and development with no visible threats on the horizon. The bottom line in corn is that if the export pace weakens, and weather in South America remains favorable, rallies will struggle.
Bean Outlook
Optimism in soybeans abounds on the hope of a trade deal being struck with China when President Trump and Xi meet next week. Trump mentioned in a comment recently that he is pushing China to buy soybeans in the amount they had in prior years. However, his tone toughened on Tuesday when he threatened a 155 percent tariff on Chinese imports. This is mostly posturing ahead of the meeting. Meanwhile, it must be remembered that China has a huge investment in South America’s infrastructure, and the primary focus in their meeting will be on rare earth minerals. Looking at exports last week, they were a marketing year high of 54.1 MB. Mexico stepped up to the plate taking shipments of 6.6 MB, along with other trading partners receiving large deliveries as well. In other matters, harvest is progressing and likely near 73 percent complete. The bottom line in soybeans is that a great deal of optimism has been built into values betting on a trade deal. If Trump walks away with only a token commitment from China, or empty handed, it will be a huge disappointment.
Wheat Outlook:
There is not a great deal of fresh news in wheat with it being underpinned mostly from strength in corn and soybeans. Export inspections last week exceeded the previous week at 17.6 MB and were above the average of 15.2 MB that must be shipped weekly to meet USDA’s target of 900 MB. However, the pace is showing signs of weakness as it has fallen nearly 26 percent since mid-September. The bottom line in wheat is that competition will be intense because of increased production prospects from our competitors.
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