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Corn Outlook:
This week, the USDA lowered their prospective planting estimates for corn 3.4 million acres to 95.3 million. However, even with the reduction, stocks remain plentiful. The factor that has supported the market is the war with Iran driving energy prices higher, and strong exports. Meanwhile, President Trump said on Wednesday that Iran wants a ceasefire, and the war could end within 2-3 weeks. However, some are skeptical. Last week was a good week for corn exports with inspections of 70.4 MB. This was higher than the average of 67.0 MB that must be shipped weekly to meet USDA’s target of 3.3 BB. While last week’s inspections were impressive, the pace is nip and tuck as to whether their projection will be reached. The bottom line is that it may be a challenge for prices to move a great deal higher without a flare up with Mother Nature this summer, especially if a ceasefire with Iran is in the making.
Bean Outlook
USDA projects planted soybean acres rising to 84.7 million, up 3.5 million from a year ago. However, that is being overshadowed by the scheduled meeting between President Trump and Xi of China in mid-May, and the EPA recently raising the biofuel quota. Traders are hopeful of China possibly buying an additional 8.0 million tons of soybeans. While they may agree to some purchases, it might be no more that 2-4 million tons as Brazil is harvesting a record crop, and is cheaper than the U.S. Looking at exports, inspections last week were disappointing at 21.5 MB. China took 9.9 MB, their smallest shipment since late December. Right now, the key to soybeans lies with soy oil which appears to be entering the final leg of its rally.
Wheat Outlook:
This week, the USDA lowered all wheat acres 1.6 million to 43.7 million, the lowest since 1919. Meanwhile, dry conditions in western Kansas, Oklahoma, and the Texas Panhandle are expanding which could offer support if showers are not received soon. In the meantime, exports are limping along with inspections last week of 13.3 MB. They must average 19.2 MB each week to meet USDA’s target of 900 MB. Currently, the pace is running behind for it to be met. The bottom line is wheat faces some fundamental crosscurrents.
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