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Corn Outlook:
The focus in corn remains on harvest progress, yield reports, and exports. Harvest is progressing at a steady clip of 25 percent complete compared to the average of 24 percent. Meanwhile, yields vary. Areas in Iowa and Nebraska that were impacted by dry conditions and the derecho storm that swept through earlier this summer are reporting lower than expected yields. This is reflected by Iowa’s harvest pace running 15 percent above its average. Looking at exports, inspections last week were 34.0 MB and below the average of 46.3 MB that must be shipped on a weekly basis to reach USDA’s projection of 2.325 BB. Once the door on harvest begins to close, traders will focus on planting and conditions in South America. With tightening U.S. stocks, any threatening conditions is Brazil or Argentina will be seized upon by the bulls.
Bean Outlook:
Soybeans remain underpinned from China’s active purchases of U.S. soybeans in addition to dryness in northern and central Brazil creating planting delays. Last week, export inspections were a marketing year high of 61.2 MB with China taking 32.3 MB. However, their interest will likely turn to South America in November. That is the time when U.S. exports generally peak. In other developments, harvest is running at a fast pace of 38 percent complete compared to the average of 28 percent. Like corn, yields in areas of Iowa and Nebraska impacted by dry conditions and the derecho storm are disappointing. While the fundamentals in soybeans look solid, the fund long position is worrisome. They are currently long 905 MB, their largest position since June 2016. This implies that any loss of interest from China, or another adverse development, could quickly derail the market’s advance.
Wheat Outlook:
Wheat is being propped up from dryness in eastern Europe, Russia, and the central Plains. News has circulated recently that Russia will impose export quotas, possibly next month. Meanwhile, winter wheat planting is progressing smoothly and is 52 percent complete compared to the average of 47 percent. While Egypt is passing on U.S. wheat, exports this season are running 10 percent above a year ago. Inspections last week were 23.6 MB and above the average of 17.9 MB that must be shipped each week to reach USDA’s target of 975 MB.
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