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The equity markets have bounced from last week’s rout, but fear and panic over the coronavirus persist. To put the situation in perspective, there are more deaths from the flu each year than the coronavirus. That said, with the calendar having turned to March, the grains should begin to focus on planting and spring weather. Looking at the long-range forecast for March-May, the eastern and some portions of the western Corn Belt are expected to see above normal rainfall meaning there could be planting issues. In other developments, exports are improving with inspections last week at 35.2 MB. However, they must average 44.9 MB each week to reach USDA’s projection of 1.725 BB which is going to be a long shot.
The bull’s carcass has been picked clean with the bears beginning to cover some of their short soybean positions. However, a sustained price recovery will be difficult because the impact of the coronavirus on China’s economy remains a big unknown. Expectations that they can meet the terms set in the Phase I trade agreement are in question. Possibly the WASDE report next week will shed some light. In the meantime, exports remain sluggish. Inspections last week were 24.6 MB, just a heartbeat above the previous week’s marketing year low. Since late November, shipments have fallen 55 percent and, as mentioned in previous comments, could sink 60-80 percent before the marketing year ends. Looking at Brazil, their harvest is 40 percent done which is in line with the average.
News in wheat is relatively scarce. The dollar has fallen the past couple of weeks which may help exports. However, its long-term uptrend remains intact. Export inspections last week were promising at 24.0 MB and above the average needed to reach USDA’s projection of 1.0 BB. Last week’s shipments were the second highest for the marketing year. Crop conditions in the southern Plains are improving and a 40 percent increase in Australia’s crop next season will offer resistance.
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