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Corn Outlook:
The grains saw an increase in volatility this week from impulsive fluctuations in the metals and energy markets, as well as a social media post by President Trump regarding potential soybean sales to China. Meanwhile, corn is seeing exports starting to slip. Last week, inspections were 44.7 MB, the third smallest of the marketing year. This was well below the average of 63.8 MB that must be shipped on a weekly basis to meet USDA’s target of 3.2 BB. Currently, we are on track for shipments of 2.970 BB. There may not be much in the way of improvement because the recent rise in the dollar puts Brazil as a cheaper source. The bottom line is that price gains may be limited.
Bean Outlook
Soybean exports have been holding their own recently with the question being whether China will make additional purchases beyond their 12-million-ton obligation. In a social media post this week, President Trump said that he and President Xi discussed the prospect of China purchasing an additional 8 million tons, bringing their total to 20 million tons for the current season, and possibly buying 25 million tons for next year. However, details are lacking, and whether this comes to fruition is another matter because of the record crop in Brazil, and being $37 cheaper per ton than the U.S. This raises skepticism of China’s intentions in buying more because of the price differential. The bottom line is politics appear to becoming more of a driver in soybeans than the fundamentals.
Wheat Outlook:
The recent rise in the dollar and the expectation of a record crop in India is a stumbling block for wheat. However, support for the past couple of sessions has been from the rally in soybeans. Meanwhile, exports are disappointing. Last week, inspections were 12.0 MB and must average 16.8 MB on a weekly basis to meet USDA’s target of 900 MB. Currently, shipments are on track for 830 MB. The most supportive factor in the market is the funds are short 480 MB, which is a hefty sum.
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