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The bulls continue to maintain a positive outlook in corn from expectations of fewer planted acres this season due to inflated input costs, a slow start in planting, and strong exports. As of last week, only 7 percent of the crop had been planted compared to 16 percent a year ago and 15 percent for the average. Exports are stellar with inspections last week a marketing year high of 64.9 MB. While the outlook for corn looks rosy now, there may be come dark clouds forming. One is China has had a strong appetite for corn. However, deliveries to them last week were the smallest since early February. Also, their pace of shipments has fallen 12.5 percent since late March. In the meantime, the index funds, or large institutional investors, who play on inflationary expectations and the economy, have lightened their longs the past couple of weeks. These could be factors down the road.
Soybeans seem to be marking time until there is news that stimulates greater interest. Right now, they are mostly supported by strength in corn and inflationary issues. While more acres are expected to be planted this season, planting is off to a slow start at 3 percent complete compared to 7 percent a year ago and 5 percent for the average. Looking at exports, they are holding their own with inspections last week at 22.1 MB. This is just above the average of 21.2 MB that must be shipped on a weekly basis to reach USDA’s projection of 2.115 BB. While it appears that their target will be met, the increase in Covid cases in China leading to lockdowns could mean a slowdown in their imports.
Wheat is being underpinned from a slow start in spring planting, and a deteriorating winter wheat crop. Last week, the rating of the winter crop fell 3 points to 27 percent in good-to-excellent condition. This is the lowest rating since 1989 when 25 percent of the crop was in the good-to-excellent category. Meanwhile, there is not much support from exports as they were meager last week at 10.5 MB. We must average shipments of 22.0 MB each week to reach USDA’s target of 785 MB. Currently, exports are on track for 740 MB.
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