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Attention in the grains is focused on estimates of production losses in South America because of dry weather, and developments in the conflict between Russia and Ukraine. Hopefully, the crop report due later this month will shed more light on South America’s situation, while the dispute among Russia and Ukraine will simply have to play out. Meanwhile, corn exports have been improving since early November, but have a long way to go in reaching USDA’s target of 2.425 BB. Inspections last week were below the previous week at 40.7 MB and must average 55.9 MB each week to achieve their projection. For that to happen, China will have to pick up the pace. Since the end of December, their appetite for corn has increased, but will it continue?
Soybeans continue to be underpinned from private analysts lowering their production estimates in Brazil. Last week, AgRural reduced their estimate 4.9 million tons to 128.5 million while Datagro has lowered theirs to 130.0 million. USDA’s forecast last month was 139.0 million. In other matters, export inspections improved slightly from the previous week at 51.8 MB. China took 26.7 MB or 51.6 percent of shipments. However, since early November, the pace of shipments to them has fallen 50.5 percent. Looking in the weeks ahead, the focus in soybeans will turn to the potential increase in plantings this spring which could be substantial.
Volatility in wheat remains high because of escalated tensions between Russia and Ukraine. Concerns are that increased aggression could result in a disruption of exports in that region. However, that is not an advantage to either side. Meanwhile, should it occur, the E.U., Australia, Argentina, and possibly the U.S. would benefit. Looking at exports, inspections last week fell below the previous week at 13.2 MB. We must ship 19.1 MB on a weekly basis to reach USDA’s projection of 825 MB.
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