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Covid 19, once again, is the lead story in the grains as its recent upsurge has caused a sharp downturn. It is especially a thorn in the side of corn as the funds are sporting a long position of 1.2 BB, their largest long since March 2018 that will act as a headwind. Meanwhile, harvest is in the final furlong at 72 percent done which means that China and South America’s crop will take center stage once it is done. Expectations are that China could import up to 30 million tons of corn. However, prudent judgement suggests paying attention to what they do, not what everyone says. Looking at exports, inspections last week were shabby at 25.0 MB and must average 47.3 MB each week to reach USDA’s projection of 2.2325 BB. Meanwhile, the pace of shipments has fallen 9.5 percent since early October. That said, business from China is a definite must for the USDA to meet their projection.
With soybean harvest winding down at 83 percent complete, Brazil’s crop will take a greater role. Dry conditions have caused their planting progress to lag, but recent showers should speed up the pace. While South America will be in the focus this fall and winter, China remains in the spotlight because of their massive imports. Last week, export inspections were a marketing year high at 97.8 MB with China taking 65.4 MB or 66 percent of shipments. However, this is down slightly from the previous week and the first decline since the first week of October. We should pay attention as U.S. exports tend to peak in November. This could possibly be a sign that their interest is beginning to turn to Brazil’s crop because of improving conditions.
The rally in wheat has hit the pause button because of recent showers in the Plains and forecast for scattered rain in Russia. Winter wheat planting is progressing quickly at 85 percent and should soon wind down. Looking at exports, inspections were uneventful this week at 13.3 MB and must average 18.3 MB each week to reach USDA’s projection of 975 MB. Since late September, the pace of shipments has been on the downswing falling 27 percent. Right now, shipments are on track for 907 MB.
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