On The Money Grain Commentary 4-20-23

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Corn Outlook:

Corn planting has barely begun at 8 percent complete, and the forecast of a potential frost later this week may cause a temporary lull in planting. However, there are not many concerns. Meanwhile, worries that Russia could back out of the grain accord with Ukraine, unless their demands are met to bolster their grain exports, have been an issue. As mentioned in previous comments, geopolitical issues are increasing in relevance. In other developments, export inspections were a marketing year high of 47.8 MB but must average 50.3 MB on a weekly basis to achieve USDA’s projection of 1.850 BB. This will be a challenge. Although the pace of shipments has improved since mid-February, the tempo is still running 260 MB below their target.

Bean Outlook:

Soybeans got a boost early this week from cold temperatures in the forecast that could delay planting. However, prices have since backed off along with the decline in other commodities. Looking at exports, inspections last week were below the previous week at 19.3 MB but above the average of 15.0 MB that must be shipped each week to reach USDA’s target of 2.015 BB. China took 10.2 MB. Although the overall pace of shipments has been declining, and are down 74 percent from their peak in November, they are still on track to meet USDA’s projection. Meanwhile, be aware that competition will be keen with Brazil, as Conab recently increased their production estimate 2.2 million tons to 153.6 million, while Abiove raised their exports 1.4 million tons to a record 93.7 million. This is the result of increased demand from China.

Wheat Outlook:

A potential frost is forecast later this week in areas of the Midwest which could add to the wheat crop’s woes. Furthermore, there is a cloud over hanging whether the grain accord between Russia and Ukraine will be renewed. Last week, the rating of the winter wheat crop stood unchanged at 27 percent in good-to-excellent condition compared to 30 percent a year ago and the 10-year average of 46 percent. However, the low rating has mustered little positive response. Looking at exports, inspections were dismal last week at 8.8 MB and must average 16.5 MB to reach USDA’s projection of 775 MB. Currently, the pace is running 50 MB below their target. Competition with Russia will remain intense as their production is forecast to rise 1.5 million tons to 86.8 million.

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