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Corn Outlook:
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Volatility in the grains persists as President Trump’s tariff agenda changes like the March wind keeping everyone guessing as to where the next shoe may drop. Meanwhile, as we get closer to the end of the month, the focus will shift to the Planting Intentions Report. The Ag Outlook Forum last month showed corn acres increasing 3.4 million to 94.0 million acres. However, some think that they could be as high as 95.0-96.0 million. Looking at exports, inspections were spectacular last week, a marketing year high of 71.6 MB with Mexico the largest buyer. Since early January, the pace of shipments has risen nearly 40 percent. Right now, the greatest roadblock to corn is the potential increase in planted acres this spring, a recession that may be looming, and the size of the long position of the funds that currently stands at 2.4 MB
Bean Outlook
China has levied a 10 percent tariff on U.S. soybean imports in response to the Trump tariff agenda. However, its impact will likely be minimal as the sourcing of their needs has primarily turned to South America. Last week, export inspections were 31.0 MB with China taking 10.1 MB. Since mid-November, deliveries to them have fallen 77 percent while our overall shipments have declined 66 percent. This is a reflection that China’s tariff should have little impact. In other matters, harvest in Brazil is 60 percent complete, and recent showers in Argentina has improved crop conditions. The bottom line in soybeans is that the short position of the funds has risen to 345 MB. Although fewer acres are expected to be planted this spring, their resolve may not be shaken easily if exports continue to deteriorate.
Wheat Outlook:
Temperatures are rising which means the winter wheat crop will soon emerge from dormancy making weather a greater factor. Overall, the crop is relatively good in the central and southern Plains. However, poor conditions persist in the Black Sea region. Meanwhile, exports continue to be erratic. Last week, inspections were a meager 7.9 MB with pace well below the average to meet USDA’s projection of 835 MB. Furthermore, the USDA has increased their global stocks estimate 2.5 million tons which offers the bulls little incentive. Currently, the funds are short 480 MB and may have little reason to cover unless weather becomes a factor once the crop emerges from dormancy.
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