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Corn Outlook:
Grain traders are in the dark because of the government shutdown, but a record harvest of corn may be headed to the bin with ending stocks possibly rivaling those in 2016-17 of 2.350 BB. However, we may not know the size of the crop until January. Meanwhile, if a record supply materializes, it is paramount that demand remains strong. As mentioned before, feed consumption is questionable because of low cattle numbers. However, exports have been robust, 56.4 percent higher than last year, and that must continue. So far, this has been the case with inspections of 62.9 MB last week—a marketing year high. To meet USDA’s projection of 2.975 BB, we must ship 57.6 MB on a weekly basis. If the current pace continues, it is attainable. However, even if exports stay strong, price gains will be limited because of an oversupply.
Bean Outlook
Traders continue to be optimistic that a trade deal involving soybeans might evolve from the meeting between President Trump and Xi of China at the end of this month. However, as mentioned before, China has invested billions in Brazil’s port and transportation infrastructure over the years to decrease their reliance upon the U.S. That said, they are holding the cards, and a huge carrot will have to be offered for them to increase their imports from the U.S. Even if a deal is struck, it would likely only be a token amount. Meanwhile, their absence shows as our cumulative shipments this season are down 14.7 percent from a year ago. Last week, export inspections were 28.2 MB and must average 33.4 MB each week to meet USDA’s target of 1.685 BB. Currently, we are on track for shipments of 1.255 BB. The bottom line is that ending stocks could rise substantially from USDA’s present estimate of 300 MB without China’s business.
Wheat Outlook:
Wheat exports are rising, but the market is meeting a headwind as the production and exports of our competitors have been growing as well. Last week, export inspections were down from the previous week at 18.5 MB, as well as the average of 25.3 MB that must be shipped weekly to meet USDA’s projection of 900 MB. So far, we are ahead of the pace for it to be met, but the market is showing little response. The bottom line is wheat needs another story to tell to attract bullish interest.
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