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Corn Outlook:
The conflict in the Middle East is taking a different direction with President Trump establishing a naval blockade of Iranian ports. Unless an agreement is reached ending the hostilities, shipping through the Strait of Hormuz will be limited and complicated, posing an increased risk for the global economy along with higher inflation. Meanwhile, corn planting is getting underway and is 5 percent complete versus the average of 4 percent. While the Middle East is the focus on everyone’s mind, the growing season has begun which means weather will be of increased importance. Looking at exports, they remain solid with inspections last week of 70.1 MB. This is above the average of 66.1 MB that must be shipped weekly to meet USDA’s target of 3.3 MB. The bottom line in corn is that it faces several unknowns, but stocks are abundant.
Bean Outlook
Soybeans continue to be underpinned from optimism of the summit meeting between President Trump and Xi of China scheduled in mid-May. Traders are hopeful that China will agree to additional purchases from the U.S. However, the situation in the Middle East may raise some issues, creating a roadblock. Keep in mind that 10 percent of China’s oil imports comes from Iran with 55 percent from the Middle East. The blockade of Iranian ports could disrupt oil shipments to China creating a contraction in their economy. That said, they may look the other way in being receptive to additional soybean purchases from the U.S. Meanwhile, looking at exports, inspections last week were 29.9 MB with China taking shipments of 12.7 MB. Since early February, our overall pace of shipments has fallen 40 percent
Wheat Outlook:
Wheat has found support from western areas in the southern Plains missing needed rainfall. The winter wheat crop has emerged from dormancy and is in the critical stage of development. Last week, the crop rating fell one point to 34 percent in good-to-excellent condition and compares with the rating of 47 percent a year ago. Looking at exports, they are stirring little interest with inspections last week of only 11.7 MB. Currently, they are below the pace needed to meet USDA’s projection of 900 MB
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