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Many are wondering how a Biden Administration will impact ag. Well, let’s not count the chickens before they hatch. While the media has declared him the winner, it must be remembered that it is up to the electors of the Electoral College to cast their vote for President. Congress then certifies the winner, not the media. With the election headed to court, the winner is still up for grabs. Meanwhile, looking at corn, there is a high level of optimism that China will purchase large quantities from the U.S. In this month’s crop report, the USDA raised their imports 6.0 million tons to 13.0 million. Thoughts are that it could eventually be boosted to 22-30 million. Domestic exports were increased by 325 MB which drew ending stocks for 2020-21 down to 1.702 BB. This is the tightest supply since 2015. While the fundamental outlook is turning more positive, be aware that the fund long position has risen to its highest mark since March 2011 and presents a threat.
Traders remain optimistic about China’s appetite for U.S. soybeans. However, a word of caution is warranted as the USDA left their export estimate unchanged in this month’s crop report. In addition, China’s imports were unchanged as well. Meanwhile, export inspections last week were sensational at 91.7 MB with China taking 60.1 MB or 65 percent of shipments. Be aware that soybean exports generally peak in November, although they have not shown signs yet. In the meantime, stocks are shrinking at 190 MB, their smallest since 2015. This will probably keep the bulls’ interest until South America’s crop is more established.
In the weeks ahead, wheat will probably be a follower of corn and soybeans. The winter wheat crop has improved slightly with the ratings up 2 points to 45 percent in good-to-excellent condition. However, this is well below last year’s rating of 54 percent. Right now, the biggest issue hanging over wheat is that world stocks are near a record. In addition, the USDA raised Russia’s production 500,000 tons in the latest crop report, as well as their exports.
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