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February is shaping up to be an uneventful month in the grains. Exports are slow, and there are no fireworks in South America’s weather. Watching lady bugs would offer greater excitement! Right now, the grains are mostly taking their cue from the outside markets and economic developments in China. Their purchasing managers index has declined for 18 consecutive months, which does not bode well for China’s economy. Back home, export inspections in corn last week were routine at 26.8 MB, and below the average of 41.0 MB needed each week to reach USDA’s target of 1.7 BB. The funds continue to unwind their short bets and have reduced their position 370 MB to 645 MB. Continued short covering may offer additional support. In the meantime, look for the grains to follow outside developments until the Planting Intentions Report on March 31st.
While rain would benefit soybeans filling pods in Argentina, weather is becoming less of a factor in South America. Harvest is getting underway in Brazil and is 4 percent complete. This is 2 percent behind last year, but is in line with the five year average. Yields in Mato Grossa are said to be improving. Looking at exports, inspections were 42.3 MB, down slightly from the previous week. Last week, was the twelfth consecutive week they have declined. China took 30.0 MB or 73 percent of shipments. In other developments, after two weeks of reducing their shorts, the funds added 30 MB to their position last week increasing it to 415 MB. The next mover and shaker in soybeans will be the Planting Intentions Report on March 31st.
There is little fresh news in wheat. Conditions in the southern Plains and the Black Sea region remain favorable. Meanwhile, exports are lethargic. Inspections last week were 10.3 MB, and must average 17.1 MB each week to reach USDA’s projection of 800 MB. The pace of shipments has declined for four straight weeks. Meanwhile, the funds continue to unwind their shorts. Last week was their third week of liquidation as they shed 45 MB reducing their position to 460 MB.
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