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Traders bullish corn may be painting themselves into a corner. For the past couple of months, their focus has mainly been on dry conditions in Argentina. However, our exports are not exactly a shining star. Last week, inspections were nominal at 20.1 MB, and well below the average of 48.6 MB that must be shipped weekly to reach USDA’s target of 1.925 BB. Since late December, the pace of shipments has fallen 18.9 percent. Meanwhile, for the second week in a row, China has been a no show. I have not seen this happen before. Also, the recent supply-demand report showed that Brazil has overtaken the U.S. as the world’s leading exporter of corn. While traders are currently preoccupied with Argentina’s weather, be aware that for the reasons mentioned, they may be in store for a rude awakening.
For weeks, soybeans have been underpinned from weather in Argentina, wet conditions in Brazil that have delayed harvest, and strength in soybean meal. However, the rally in meal appears to be in its later stage. Meanwhile, there are some cracks that seem to be developing in the market’s advance. Last week, export inspections were 57.1 MB, the lowest seen since the first week of January. China took 36.6 MB, also their smallest shipment since early January. For four straight weeks, the pace of shipments has been rising. However, this week, there was a downtick. These developments may be signs that China is beginning to turn its interest to Brazil.
Overall dryness in the southern Plains has been supporting wheat, as well as uncertainty as to whether Russia will renew its agreement with Ukraine next month to allow grain shipments from the Black Sea Region. Meanwhile, exports are holding their own with inspections last week at 17.3 MB. This was above the average of 14.7 MB that must be shipped each week to reach USDA’s target of 775 MB. Currently, the pace of shipments is running slightly above the level needed for it to be met.
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