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Corn Outlook:
After this week, grain traders will basically pack their bags and not return until after the new year begins. When they come back, their focus will center on China, the production outlook in South America, exports, and spring planting estimates. Looking at corn, exports have been the bright spot offering support up to this point. While U.S. corn is competitively priced, exports show signs of peaking. Last week, inspections were 62.3 MB, which is slightly below the average of 62.5 MB that must be shipped weekly to meet USDA’s projection of 3.2 BB. While this is not a great concern for the moment, the pace of shipments has fallen 10.2 percent since the third week of November. The bottom line is we have an abundant supply of corn with ending stocks of 2.0 BB. If the export pace weakens further, support for the market could diminish.
Bean Outlook
Since mid-November, the bulls have been put through the wringer, as traders are coming to grips with the realization that China’s agreement to purchase 12 million tons of soybeans is not materializing. So far, their purchases are approximately 7 million tons. The one thing that you can count on with China is they cannot be counted on! Looking at exports, inspections last week were 29.2 MB with China taking 7.4 MB. Since the first week of November, the overall pace of shipments has declined 23 percent. Meanwhile, Brazil’s harvest will begin in 3-4 weeks with Conab projecting their production a record 177.1 million tons. The bottom line is that soybeans are probably facing a rough road ahead for the next several weeks.
Wheat Outlook:
Wheat continues to struggle as global stockpiles continue to grow. Recently, Argentina’s production was increased 3.2 million tons to a record 27.7 million. Meanwhile, China has purchased a cargo from them, their first in a decade. Currently, Argentina is the cheapest source of wheat. Looking at exports, inspections last week exceeded the previous week at 17.9 MB and were above the average of 15.8 MB that must be shipped weekly to meet USDA’s target of 900 MB. The bottom line in wheat is that it lacks positive news to offset the growth in stocks.
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