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The bears are piling on even though corn planting is behind schedule. As of last week, 6 percent of the crop had been planted compared to the average of 12 percent. Illinois, Missouri, and Minnesota are lagging the most at 16 percent, 17 percent, and 11 percent below their average. The mid-range forecast through the first week of May indicates that their progress will remain at a snail’s pace. However, the delay has not deterred the bears, as the short position of the trend following funds has risen to a record 1.620 BB. In the meantime, the longs of the index funds are at 10-year low, and commercial traders are long for the first time since 2006. Could this, along with the lack of fear, become the bears Black Swan? Looking at exports, inspections were a marketing year high at 53.2 MB with the pace of shipments rising for the past 5 weeks.
News regarding China has fallen to the wayside as traders realize that a trade agreement may not be finalized until June. The topic has been beaten to death and is old news. In the meantime, soybean planting has begun and is 1 percent complete compared to 2 percent for the average. Because of early spring flooding, planting in the Southeast is lagging with Arkansas, Louisiana, and Mississippi running 12 percent, 14 percent, and 15 percent behind their average. In other developments, exports remain lethargic with inspections last week a marketing year low of 14.0 MB. China took 2.4 MB which is below their average shipment of 11.8 MB over the past 15 weeks. Looking at the funds, they have increased their short position 115 MB to 540 MB. The record is 735 MB which means there is room for it to grow.
Wheat values continue to erode because of decent crop conditions and a dismal export outlook. Last week, the crop rating improved 2 points to 62 percent in good-to-excellent condition. This compares to the 10-year average of 47 percent. Because of excessive wet conditions in the upper Midwest, spring wheat planting has been slow to progress, and is only 5 percent done compared to the average of 22 percent. Export inspections last week were a marketing year high of 29.8 MB with shipments rising the past 3 weeks. However, we will likely still fall short of USDA’s projection of 945 MB. Looking at the funds, they have increased their short position 70 MB to 500 MB. The record is 945 MB.
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