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There is not much that can be said for corn other than exports have improved slightly but will not win any trophies. Inspections last week at 20.6 MB were the best seen since late September. However, they are well below the average of 48.7 MB that must be shipped each week to reach USDA’s target of 2.150 BB. In addition, the pace of shipments is running 37.2 percent below the five-year average. While lagging exports pose a headwind longer term, dryness in Argentina has gained attention and may offer support short-term. Their forecast shows hot temperatures and scattered showers next week. Meanwhile, open interest in corn has fallen 35 percent since May, while the long position of the index funds has declined 26 percent. This reflects the lack of interest from the speculative crowd.
Soybeans are being supported from China easing Covid 19 restrictions in certain major cities. Thoughts are that this will give their economy a boost and improve demand for soybeans. If there is an improvement in demand, most of the business will likely go to Brazil as China’s interest seems to have shifted to them. Last week, export inspections were solid at 63.2 MB; however, they have been falling the last few weeks. Since early November, the pace of shipments has fallen 20.1 percent, while those to China have declined 21.8 percent. As mentioned in previous comments, when exports peak, they usually drop 65-85 percent until the end of the marketing year. That said, for higher values to be sustained, a weather incident in Brazil will probably have to develop, or continued dryness persist in Argentina. In the meantime, the speculative crowd seems to have lost interest as open interest since February has fallen 35 percent while the longs of the index funds are down 41 percent.
Wheat is caught in the crosshairs of dry weather taking a toll on the crop in the southern Plains, while Russia is forecast to produce a record crop. Meanwhile, exports are struggling. Last week, inspections were the highest seen since early October at 12.2 MB. However, that is not saying much as the pace of shipments is running 35.4 percent below the five-year average. Keep in mind that Russia is the world’s largest exporter of wheat with a market share of 20 percent. Meanwhile, the U.S. is fifth with a market share of 10 percent.
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