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The coronavirus is spreading, but fear of a global pandemic seems to be subsiding amid optimism that efforts by China will bring it under control. However, the virus is a mere bump in the road compared to the political instability and evolving demographics that we will face this decade. That is a story for another day. Meanwhile, the resilience of China’s economy is the big question and whether they can meet their obligation in the trade agreement. Time will tell. Looking at corn exports, inspections last week were up slightly at 22.1 MB. The pace has picked up the past couple of weeks, but we need to ship 45.0 MB each week to reach USDA’s projection of 1.775 BB. Unless buyers become active soon, the odds of it happening are unlikely.
While news continues to be centered around the coronavirus, little is being said about Brazil’s soybean harvest which is getting underway at 9 percent complete. Mato Grosso, the largest producing state, is 28 percent done. So far, better than average yields are being reported which means another large crop is looming. It will be ready to ship in 4-6 weeks. Even if China increases purchases from the U.S. and reduces those of Brazil, global supply will not change. Looking at exports, inspections last week were 44.4 MB and have picked up the past 3 weeks. Shipments to China were 20.3 MB, their highest since mid-December. While traders would like to see more, we cannot complain because the impact of the coronavirus on demand is still unknown.
Improving conditions in the southern Plains and Australia has weighed on wheat the past couple of weeks, but it is beginning to recover. Meanwhile, the dollar has turned up suggesting that gains may be limited. Looking at exports, they are mediocre at best. Inspections last week were 15.2 MB which was a stark improvement from the marketing year low of 8.2 MB set the previous week. However, shipments must average 21.3 MB each week if USDA’s target of 975 MB is to be reached. Inspections have not attained the weekly average necessary since mid-January. Right now, shipments are on track for 900 MB.
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