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Normally, at this time of the year, the discussion is on spring weather, planting intentions, and who gets the lions share of acres, corn, or soybeans. However, little has been said about this, so far, as the focus remains on the production shortfall in South America, and the situation between Russia and Ukraine. Eventually, these concerns will pass. In the meantime, 57 percent of Brazil’s safrinha’s corn crop is planted, and recent isolated showers should help with development. Export inspections were solid last week with inspections of 57.2 MB, which was above the average needed to reach USDA’s projection of 2.425 BB. After a downtick in shipments to China last week, they rose this week, and were the highest of the season.
Soybeans remain the shining star of the grains. This is where most of the fund interest lies. Currently, they hold their largest long position in nearly a year. The production shortfall in South America continues to capture bullish interest of traders. Recently, Conab lowered their soybean crop estimate in Brazil to 125.4 million tons. This was slightly below the lowest trade guess of the WASDE report of 126.5 million tons. However, be aware that these estimates are likely already baked into values. In other matters, export inspections last week were below the previous week at 42.2 MB. China took 18.6 MB, or 44 percent of shipments. The pace of shipments to them continues to decline and is down 59 percent from early November.
Wheat continues to flow with developments between Russia and Ukraine. Prices rise or fall depending upon the rhetoric and level of tension. Meanwhile, export inspections were a nonevent last week at 15.9 MB. They must average 18.5 MB each week to reach USDA’s target of 810 MB. Right now, they are on track for 755 MB.
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