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Corn Outlook:
For weeks, corn was supported from the strength in soybeans and the hope of China increasing their purchases of U.S. grains. However, there are no signs of that happening, which caused prices to turn lower this week. In the crop report last week, the USDA lowered China’s imports of corn 2.0 million tons to 8.0 million. Meanwhile, exports continue to excel as our traditional customers have picked up the slack. Last week, inspections were a marketing year high of 80.8 MB with Mexico and Japan stepping up with increased shipments. The overall pace of shipments has risen the past 3 weeks and is currently on track to reach USDA’s projection of 3.075 BB. However, the market faces a hurdle in that ending stocks, at 2.154 BB, are the third largest since 2016, plus big crops are on the horizon in South America.
Bean Outlook
Soybeans soared early this week when the USDA announced sales totaling 1,584,000 tons to China. However, they have since cooled as these purchases may only be a goodwill gesture as Brazil is $2 per ton cheaper than the U.S, while Argentina is $11 cheaper. Their agreement is to purchase 12 million tons by the end of the year, and 25 million annually for the next 3 years. However, because of lower values in South America, China may not be quick to make additional commitments until they see how the Supreme Court rules on the legality of Trump’s tariff policy. According to the betting odds of the professional gamers, there is only a 24 percent chance of the Supreme Court ruling in Trump’s favor. With that in mind, a cloud will continue to hang over China’s intentions because, if the Supreme Court rules against Trump, the game changes. Meanwhile, in other matters, export inspections last week were slightly above the previous week at 43.2 MB.
Wheat Outlook:
Wheat has mostly been supported by the strength in soybeans. However, price gains may be limited as the USDA forecasts U.S. ending stocks rising 57 MB to 901 MB with world stockpiles growing 7.0 million tons to 271.4 million. Looking at exports, they were disappointing last week with inspections a marketing year low of 9.0 MB. In the first rating since the government shutdown, USDA rates 45 percent of the winter wheat crop in good-to-excellent condition versus 49 percent a year ago.
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