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Corn futures are marking time until the Planting Intentions Report on March 31st. At that point, planting will be underway in the Southeast kicking off a new growing season. Until then, the market will keep tabs on acreage estimates, macroeconomic issues, such as the dollar and crude oil, and developments in soybeans. Last week, corn futures received welcomed news when export inspections were reported at a marketing year high of 50.3 MB. This is the first time in many weeks that they have exceeded the average needed to reach USDA’s projection of 1.750 BB. Last week, the trend following funds unloaded 100 MB from their long position reducing it to 120 MB. They have been abandoning their longs since late December, which has been a factor keeping the market in a trading range.
The truckers strike in Brazil is winding down with the market now looking ahead at a record crop being shipped. Every year, you can mark on the calendar that around Valentine’s Day, a strike of some type will occur during harvest in South America. Currently, harvest in Brazil is 29 percent complete, slightly below the average of 33 percent. Last week, export inspections at 23.3 MB were the lowest seen since September, but still above the average needed to reach USDA’s projection of 1.790 BB. China took 15.7 MB or 67 percent of shipments. The trend following funds trimmed 115 MB from their short position reducing it to 175 MB. This was the second consecutive week that their position has fallen.
Wheat remains on a slippery slope torn between the lack of a weather premium and struggling exports. Right now, the state crop ratings do not have a great deal to offer for either the bulls or the bears. Meanwhile, exports continue to struggle with inspections last week at 16.5 MB. To reach USDA’s target of 900 MB, we need to ship 21.2 MB each week. Last week, the trend following funds sold 10 MB increasing their short position to 265 MB. While it is not an overly large position, it is big enough to weigh on values.
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