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Corn planting in the eastern Corn Belt is lagging because of excessive wet conditions. Areas in the south are running 4-6 inches above average in rainfall. Nationwide, nine percent of the crop has been seeded compared to 6 percent a year ago and 13 percent for the average. Tennessee, Kentucky and Missouri are behind the most at 37 percent, 27 percent and 22 percent below their average. Right now, the delay does not seem to be a big concern, as decent progress is being made in Illinois, Iowa and Minnesota, while dry conditions are forecast next week. However, if the delay in the east persists, it could spark an extended recovery as the trend following funds are short 435 MB, their largest position since January 2014. When the funds covered then, prices rose 28 percent in value. In other developments, export inspections last week were better than expected at 42.0 MB.
Traders are keeping close tabs on the meeting between the Brazilian truckers union and the government this week. Some are anticipating a strike to develop, although it would probably be less of a disruption than the one in February. In other developments, Wisconsin has declared a state of emergency because of an outbreak of bird flu in a facility that houses 3.8 million birds. An additional outbreak was reported on a farm in Iowa that has 5.3 million birds. While it is not a big issue now, if the bird flu spreads, it will weigh on corn and meal usage. Export inspections were mediocre last week at 5.4 MB and below the average needed to reach USDA’s target of 1.790 BB. China took token shipments of 1.1 MB. The trend following funds have become more aggressive in their selling recently increasing their short position 140 MB to 380 MB.
There is not a lot of news in wheat with the market mostly at the mercy of the stronger dollar. Forty-two percent of the crop is currently rated in good-to-excellent condition, unchanged from a week ago, but above last year’s rating of 34 percent. Excessive moisture in the Midwest is increasing the chance for disease and fungus infestation in the soft red winter wheat crop that could lead to quality issues. Export inspections were better than expected at 20.7 MB, but below the average needed to reach USDA’s target of 880 MB. The trend following funds were more aggressive in their selling last week increasing their short position 55 MB to 465 MB. This is their largest position since January 2014.
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