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Corn has several irons in the fire that include harvest, a potential record crop in South America, sluggish exports, the Ukraine-Russia conflict, plus rising interest rates and inflation. These issues have muddied the water causing wide price swings at times. Meanwhile, harvest continues at a brisk pace, and is 61 percent complete, well ahead of the average of 52 percent. Right now, exports are becoming a concern. Inspections last week were only mediocre at 18.5 MB, and well short of the average of 44.4 MB that is needed each week to reach USDA’s projection of 2.150 BB. We are 7 weeks into the marketing year with the pace of shipments running 29 percent below their 5-year average. This will eventually become a stumbling block for corn if the dollar remains elevated, and South America produces a record crop.
Soybean exports have surged the past 3 weeks with inspections last week a phenomenal 106.1 MB. This is largely because of China’s increased interest. As it stands now, the current pace of shipments is running 6.7 percent above the 5-year average. However, China’s interest may not last much longer, as their focus generally turns to South America in November. Keep in mind that when exports peak, the pace falls on average 65-85 percent through the end of the marketing year. Unless a production shortfall occurs in Brazil, I do not expect this to change. Right now, Brazil appears to be headed for a record crop. Looking at harvest, it will soon be approaching the finish line as it is 80 percent complete compared to the average of 67 percent.
Wheat has been sucking wind lately as exports have dropped off sharply. Last week, inspections were a marketing year low of only 4.6 MB. During the past 3 weeks, the pace of shipments has fallen 39.6 percent. Right now, expectations are that the agreement between Ukraine and Russia, allowing exports from the Black Sea Region, will be renewed in November. However, that could change in a flash. In other matters, winter wheat planting is running smoothly at 79 percent complete which is on par with the average.
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