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It seems that when corn takes a step forward on yield concerns and slow harvest progress, it falls two steps back because of anemic demand. Export inspections were a marketing year high last week at 25.0 MB but below the average of 40.3 MB that must be shipped each week to reach USDA’s projection of 1.850 BB. With shipments running 59 percent less than a year ago, it does not give the bulls much encouragement. In other developments, harvest is 76 percent complete compared to the average of 92 percent. Approximately 8.4 million acres remain to be cut. However, in Michigan, North Dakota, South Dakota, and Wisconsin, there are 5.1 million acres that may not be harvested before late winter-early spring. This means that the January Crop Report may not provide insight on unharvested acres with the answer possibly not known until next spring.
Soybeans have come under pressure recently as there is no fresh news as to when Phase I of the trade deal between the U.S. and China will be signed. China is pressing for tariffs against them to be rolled back before an agreement can be inked. As mentioned in previous comments, it may be sometime in 2020 before terms are reached. In other developments, be aware that this is the time of the year that China’s focus turns to South America to meet their needs. Last week, inspections were 56.3 MB with China taking 33.5 MB. Keep in mind that exports tend to peak in November with the pace of shipments generally falling 60-80 percent by the end of the marketing year. In other developments, harvest is winding down at 91 percent complete versus the average of 95 percent. Michigan, North Dakota, and Wisconsin are lagging and, in a race to finish before “old man winter” sets in.
Last week, the rating for winter wheat fell 2 points 52 percent of the crop in good-to-excellent condition which is offering support. Continued dry conditions in Australia also underpins. Looking at exports, inspections slipped to 16.5 MB and were below the average of 18.2 MB that must be shipped each week to reach USDA’s target of 950 MB. Currently, they are on track for 900 MB.
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