On The Money Grain Commentary 4-18-24

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Corn Outlook:

Corn exports are improving but cumbersome stocks will act as a headwind limiting price gains. Last week, export inspections were 52.4 MB, and have topped 50.0 MB for three consecutive weeks. Since the third week of January, the export pace has been improving and risen 74 percent. Currently, we are on track to meet USDA’s target of 2.1 BB, and possibly exceed it. Although this is impressive, it may not be enough to cause the funds to abandon their short position that stands at 1.350 BB. To break their bearish resolve, a planting delay or a dry spell will likely be needed at some point during the growing season. Meanwhile, planting is off to a normal start at 6 percent complete compared to 7 percent a year ago and 5 percent for the average.

Bean Outlook

Finding reasons to be bullish soybeans is a difficult task as exports are anemic, in addition to an expected increase in planted acres. One may look at Conab’s crop estimate for Brazil at 146.5 million tons versus the USDA at 155.0, as a reason to be friendly, but even with Conab’s projection, their production will still be the third highest on record. Meanwhile, exports are dwindling. Last week, inspections were 15.9 MB with China taking only 7.3 MB, their smallest shipment since September. Since early November, exports to China have declined 83 percent while our overall shipments have fallen 75 percent. The bottom line in soybeans is the funds are currently short 795 MB and have little reason to abandon their position unless a production scare develops at some point during the growing season.

Wheat Outlook:

Wheat export inspections, last week, were a marketing year high at 20.2 MB and above the average of 17.8 MB that must be shipped weekly to reach USDA’s target of 710 MB. The pace of shipments the past couple of weeks has improved, but it will probably wind up being a photo finish as to whether their projection will be met. The crop rating fell one-point last week to 55 percent in good-to-excellent category, but conditions are not slouching when compared to last year’s rating of 27 percent. The bottom line in wheat is that world stocks are declining, and there is a slight improvement in exports. However, it is hard to become excited when the U.S. is ranked fifth in global exports behind Russia, EU, Canada, and Australia.

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