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Markets do not like uncertainty, but the grains have taken Tuesday’s election, which hangs in the balance, largely in stride. This implies that grains are looking at other issues. Meanwhile, corn harvest is winding down at 82 percent complete which will bring the focus this fall and winter on the crop in South America and developments in China. Expectations are growing that China will import large quantities of corn from the U.S. While that may come, the volume expected has not developed so far. Last week, export inspections were nominal at 28.4 MB and must average 47.7 MB each week to reach USDA’s projection of 2.235 BB. While the fundamentals are improving because of shrinking stocks, the funds are long 1.530 BB of corn, their largest position since March 2011. This implies that a lot of positive sentiment and capital has already been spent on China.
Soybeans continue to be underpinned from hot, dry conditions in southern Brazil and Chinese demand. However, there are early signs that purchases from them may be slowing. Last week, export inspections were brisk at 76.5 MB with China taking 54.3 MB or 71 percent of shipments. However, this is down 17 percent from the previous week. If shipments to them are lower again next week, it will send a message that their interest is waning. Keep in mind that soybean exports tend to peak in November and trend lower until the end of the marketing year. In other developments, soybean harvest, at 87 percent complete, will soon be a conversation of the past.
Moisture has fallen in the southern Plains and portions of Russia which should have weighed on wheat. However, it recovered instead. As of last week, 89 percent of the winter wheat crop has been planted with 43 percent reported in good-to-excellent condition, up 2 points from the previous week. However, this is down from last year’s rating of 57 percent and the 10-year average of 52 percent. Looking at exports, inspections last week were rather dismal at 10.5 MB. Since late September, the pace has fallen near 42 percent.
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