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Corn continues to be haunted by demand concerns created by the coronavirus pandemic and economic shutdown. This is reflected in the USDA report showing total usage falling 423 MB from a year ago, ethanol consumption down 328 MB while exports have dropped 423 MB. Although exports have improved since late January, the pace is running short of reaching USDA’s projection of 1.725 BB. Inspections last week were 40.5 MB and must average 46.1 MB each week to achieve their target. In the meantime, planting has begun with cool, wet conditions forecast through the end of the month. This could keep fieldwork at a minimum. Also, negative ethanol margins and plant closings puts a big question mark surrounding USDA’s planting intentions estimate of 97.0 million acres. Eventually, these issues may begin to offer support.
Soybeans were pressured this week because of new lows in meal. With the livestock industry being hammered, concerns are rising that demand will diminish further. In the meantime, meal appears to have one more leg down in the sell-off before a major low is found. Meanwhile, export inspections last week were 16.2 MB and below the average of 29.3 MB that must be shipped each week to reach USDA’s target of 1.775 BB. Since peaking in November, shipments have fallen nearly 73 percent which is in line with the average decline of 60-80 percent. Shipments to China are forecast to rise 1.0 million tons in the April report, but Brazil may get the bulk of the business as their exports are projected to be up 1.5 million tons.
Wheat fell this week from the forecast for showers in Russia and strength in the dollar. They have been dry for several weeks with their rainfall only 25 percent of normal during March. So far, the winter wheat crop in the U.S. has no issues as 62 percent of the crop is reported in good-to-excellent condition compared to 60 percent a year ago. Looking at exports, inspections last week were 22.3 MB and must average 28.1 MB to reach USDA’s target of 985 MB. Currently, they are on track for 893 MB.
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