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Do you remember the nursery rhyme when Chicken Little was shrieking, the sky is falling, the sky is falling? Similar expressions are being heard from the media’s 24/7 coverage of the coronavirus. It is their top story and has driven investors to seek safe haven in gold and treasuries. This generally happens when emotions are at their highest and close to peaking. Although it went largely unnoticed, export inspections in corn last week were a marketing year high of 35.9 MB. While this offers promise, inspections each week must average 44.6 MB to reach USDA’s projection of 1.725 BB. This is a tall order to be achieved, especially when a cloud overhangs the market.
At the end of last year, soybeans were on steroids from optimism that China would be making large purchases once the Phase I trade agreement was signed. Then along came the coronavirus outbreak. Right now, there is much speculation as to how long China’s purchases could be delayed. However, the virus’s impact will not be known for some time because of business closings and its spread to other countries. Meanwhile, export inspections last week were a marketing year low at 21.8 MB with China taking 5.0 MB. Since late November, the pace of shipments has fallen 44 percent. If you recall from previous comments, it has been mentioned that soybean shipments generally peak in November and decline 60-80 percent until the end of the marketing year.
Since early January, the dollar has risen 3.7 percent which has weighed on wheat. Chances are the greenback will gain another 1.0 percent making us less competitive in the world market. Last week, export inspections were mediocre at 15.1 percent. They must average 23.8 MB each week to reach USDA’s projection of 1.0 BB. Currently, they are on track for 904 MB. In other developments, there are no issues with the crop in the southern Plains.
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