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Expectations are that the corn crop will get smaller, but in order to attract the bulls, a substantial improvement in exports is needed. Inspections last week were the second lowest of the season at only 10.8 MB. We must ship 40.7 MB each week to reach USDA’s target of 1.9 BB. If the current pace continues, shipments will only total 850 MB. Look for exports to be lowered 50-100 MB in tomorrow’s report. While the focus is primarily on yield estimates, the problem is the lack of demand. In other developments, harvest is slowly progressing at 52 percent complete compared to the average of 75 percent. Traders are becoming more upbeat that the U.S. and China will sign Phase I of the trade agreement in early December. Meanwhile, China is pressing for tariff relief before a deal can be finalized.
Spirits are being lifted as China continues to buy our soybeans. Last week, inspections were the second highest of the marketing season at 54.4 MB with China taking 27.6 MB. This was the highest taken by them since early September. To get tariffs removed, they will probably put a good foot forward with additional purchases until an agreement is signed. However, be advised that when it happens, it will likely be the situation of buying the rumor and selling the fact as China will have covered most of their needs until Brazil’s crop is available for export in January. As mentioned in previous comments, soybean exports generally peak by the third week of November and trend lower for the remainder of the marketing year. In other developments, soybean harvest is in the home stretch at 75 percent complete compared to the average of 87 percent.
Wheat has shown strength recently on news that Australia will lower exports. Meanwhile, planting of the winter crop is winding down at 89 percent complete versus the average of 88 percent. Sixty-seven percent of the crop is rated in good-to-excellent condition compared to the rating of 51 percent a year ago. In other developments, exports last week had nothing to brag about as inspections were a marketing year low of 10.7 MB. We must ship 18.2 MB each week to reach USDA’s target of 950 MB. Currently, shipments are on track for 910 MB.
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