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Persistent dryness in southern Brazil and portions of Argentina has stirred bullish interest in corn for the past several weeks. This, along with weather and spring planting intentions, will be traders primary focus in early 2022. However, geopolitical issues could be a factor that blindsides them. It is no secret that China’s intentions are to be the world’s dominant superpower. They know that the U.S. is a divided country, and the timing may be prime to challenge our leadership and assert their influence among our allies. This could cause a whirlwind in currencies and the world financial markets. Meanwhile, in other matters, export inspections last week were disappointing at 28.3 MB and must average 56.2 MB each week to reach USDA’s projection of 2.5 BB. China took 20 percent of shipments but the pace to them is beginning to show signs of slipping.
Soybeans have been supported the past few weeks from dry conditions in southern Brazil. As a result, the state of Parana has lowered their production estimate 2.5 million tons to 18.4 million. Meanwhile, it should be remembered that weather markets tend to be short lived. In other developments, export inspections last week were 57.9 MB, the lowest since late September. Since early November, the pace of shipments has fallen 22.4 percent while deliveries to China have declined 39.2 percent. The bottom line is that while traders are currently focused on weather in South America, exports will eventually come back into the picture.
News in wheat is mostly nonexistent other than there is dryness in the southwestern Plains. However, this does not seem to be a factor for the moment. In other developments, exports are limping along with inspections last week at 9.9 MB. They must average 18.2 MB on a weekly basis to reach USDA’s target of 840 MB. We have not seen a shipment of that size since late September.
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