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Corn finally got good news this week with a stocks report that was 322 MB less than traders expected and 26 MB below a year ago. The reduction came from stronger than expected feed consumption. While the report is lifting the bull’s spirits, the corn market faces some hurdles, namely horrendous exports. Inspections last week were mediocre at 15.7 MB, but better than the seven-year low of 9.2 MB reported the previous week. Currently, the USDA projects exports at 2.050 BB. However, they are running well below the pace of 41.4 MB that must be shipped each week to reach their target. In other developments, harvest is progressing at 11percent complete versus the average of 19 percent. The pace will remain slow as some states are running 35-45 percent behind in maturity.
Soybeans got a boost this week from a lower than expected stocks report resulting from the USDA reducing the 2018 crop. However, there are other factors offering support as well. One is the forecast for frost in the northern sections of Minnesota, Wisconsin, and Michigan later this week. Another is the slow pace of planting in Brazil. In addition, exports are holding up well with inspections last week at 36.0 MB. This was above the average of 34.5 MB that must be shipped on a weekly basis to reach USDA’s target of 1.775 BB. China only took 5.1 MB last week with shipments to them declining the past three weeks. In other developments, harvest is progressing slowly at 7 percent complete compared to the average of 20 percent.
Wheat found support early this week from dryness being reported in Ukraine, southern Russia, and Australia. Ukraine and Russia are two of our largest export competitors. Last week, export inspections were 17.1 MB and below the average of 18.9 MB that must be shipped on a weekly basis to reach USDA’s projection of 975 MB. Currently, we are on track for shipping 895 MB. In other developments, 17 percent of the wheat crop was planted last week and is 39 percent complete compared to the average of 38 percent. Be aware that wheat is the weak link in the grains.
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