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Planting will be limited in the Ohio RiverValley this week because of soggy conditions and the forecast for additional showers. Currently, only two percent of the nation’s corn crop has been planted compared to the average of 5 percent. Kentucky, Tennessee and Missouri are trailing the most at 14 percent, 18 percent and 11 percent below their average. However, the delay in the east is not a great concern as favorable conditions are forecast in the upper Midwest, which should facilitate planting in that area. In the meantime, keep an eye on the western Corn Belt as dry conditions are expanding. Minnesota and Wisconsin are experiencing a moderate drought, as well as portions of the Dakotas, Nebraska and Kansas. In other developments, export inspections were 33.6 MB and below the average needed to reach USDA’s target of 1.8 BB. The trend following funds have increased their short futures position 55 MB to 200 MB.
Soybeans mustered a modest bounce this week after nearly reaching a six-month low. The March crushing rate rising to 162.8 MB compared to 142.0 MB in February implies that soybean demand remains healthy, although exports have tapered off . Meanwhile, the up swing may not go very far because of expectations for increased plantings this spring, and a record crop projected in South America. Harvest in Brazil is progressing smoothly, and 84 percent complete. Exports continue to dwindle with inspections last week at 16.5 MB. However, the pace is well above the average needed to reach USDA’s target of 1.790 BB. China took 7.1 MB or 43 percent of shipments. The trend following funds remain bearish and increased their short futures position 20 MB last week to 240 MB. This is not a large position suggesting that there is room for it to grow.
Wheat tumbled on Monday from much needed weekend rainfall in the southern Plains. However, some areas missed the event and additional moisture is needed. Crop conditions fell 2 points last week to 44 percent of the crop rated in the good-to-excellent category. This compares to 34 percent a year ago. Export inspections were slightly better than expected, but nothing to get thrilled about at 16.3 MB. We have to ship 22.9 MB on a weekly basis to reach USDA’s projection of 880 MB. The stronger dollar is the factor keeping prices in check. Last week, the trend following funds lightened their short position by 5 MB reducing it to 410 MB.
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