On The Money Grain Commentary 3-7-48

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Corn Outlook:

Corn is attempting to establish a bottom as values have reached a point where the bears seem reluctant to press further with the growing season just ahead, and weather always an uncertainty. Last week, the funds reduced their shorts to 1.485 BB which is still considered large. Meanwhile, on Friday, the USDA will release their supply-demand estimates with few changes expected. Most of the focus will be on South America’s production. Currently, Brazil’s safrinha corn planting is in full swing and 73 percent complete. However, acreage is uncertain because of prices that are below their cost of production. Meanwhile, export inspections last week were 42.6 MB and must average 49.5 each week to meet USDA’s target of 2.1 BB. Although the pace of shipments has been rising since the first week of February, it will be a challenge to meet their target.

Bean Outlook

Last week, the funds increased their shorts in beans to 895 MB, which is a record. Meanwhile, the fundamentals remain bearish but, like corn, values may have reached a level where the funds are hesitant to press them further. On Friday, the USDA will release its supply-demand report where few changes are expected with the focus being on South America’s production. Looking at exports, inspections last week were 37.5 MB with China taking 30.6 MB. The overall pace of shipments has been rising since mid-January but saw a downtick this week. Bottom line is that they face a major hurdle from competition with Brazil, and the prospect for increased plantings this spring.

Wheat Outlook:

There is little news in wheat other than Russia, Ukraine, and Australia remain strong competitors while crop conditions are improving in the Plains. After a marketing year high in exports last week, inspections this week were 12.9 MB. They must average 19.1 MB each week to achieve USDA’s target of 725 MB which will be a hard goal to meet.

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