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The corn market is in a transitory period as producers, end users, and traders are having to adjust to an increase in global stocks, weaker demand, a potential boost in plantings, and a mostly favorable weather forecast through April. This means that there could be a scarcity of bullish news through much of the growing season. Meanwhile, in other matters, export inspections were up slightly last week at 39.3 MB. However, they must average 48.3 MB on a weekly basis to reach USDA’s projection of 1.850 BB. This may be difficult to achieve. After a five-week absence, China returned last week taking 71,303 tons. While this offers some encouragement, they appear to be turning to Brazil as their primary supplier. Meanwhile, adding to worries in the grains are liquidity issues of several regional banks that is creating jitters throughout the financial markets.
Showers in Argentina are forecast later this week, but weather there seems to be losing its grip as a factor. This is largely because the USDA has lowered their production estimate 8.0 million tons to 33.0 million, and additional cuts will probably be minimal. Meanwhile, Brazil’s harvest is 53 percent done with a record crop of 153.0 million tons being forecast. In other matters, export inspections were slightly higher than the previous week at 22.7 MB. They must average 16.9 MB each week to achieve USDA’s target of 2.015 BB. China took 5.6 MB with their shipments falling 75.6 percent since the first week of November. Meanwhile, our overall shipments have declined 65.8 percent during the same period. Be aware that current prices levels are unlikely to be maintained if the pace of shipments continues to decline.
Wheat values are beginning to find support as it looks like Russia will renew their agreement for sixty more days allowing Ukrainian grain to be shipped from the Black Sea Region. However, a few doubts linger. Also, April will soon be upon us, and is a critical period for crop development as freezing conditions could cause plant damage. Meanwhile, export inspections last week were disappointing at 9.1 MB, and below the average of 14.6 MB that must be shipped each week to reach USDA’s target of 775 MB. Currently, the pace of shipments is running slightly below the level needed to achieve their projection.
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