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Corn Outlook:
An eight-month rally in corn does not occur very often. However, we are in the midst of one now, and the bulls are pumped with enthusiasm. Be advised, it will not last forever, but might continue a bit longer. The factors supporting the market are the tightening of stocks, dryness in Brazil, and strong exports. While not a big factor, planting is running slightly behind schedule at 17 percent complete compared to 24 percent a year ago, and 20 percent for the average. Looking at exports, they continue to shine with inspections last week the third highest of the season at 76.8 MB. China took the largest share of shipments. The pace of shipments slipped for two weeks but has turned up again. While the fundamentals look bright for corn, do not take them for granted as the geopolitical landscape is uncertain meaning the situation could change in a heartbeat.
Bean Outlook:
Soybeans are mostly following corn, but also underpinned from the tightest stocks situation since 2013. Although world stockpiles are declining, Brazil is forecast to have a record crop. Meanwhile, planting is underway, and 8 percent done compared to 7 percent a year ago and 5 percent for the average. Looking at exports, inspections last week were the second lowest of the season at 8.5 MB. They must average 13.8 MB each week to reach USDA’s projection of 2.280 BB. Since November, the pace of shipments has fallen over 89 percent. However, it is apparent that the decline in exports is taking a backseat until the crop is planted.
Wheat Outlook:
Recent freezing temperatures has had some impact on winter wheat as the ratings fell 4 points last week to 49 percent of the crop in good-to-excellent condition. This is underpinning the market along with an increase in wheat being used in feed rations. Meanwhile, planting of the spring crop is moving along and is 28 percent complete compared to 13 percent a year ago and 19 percent for the average. Looking at exports, inspections last week were 20.7 MB and below the average of 25.7 MB that must be shipped each week to reach USDA’s target of 985 MB. While wheat values have risen from some concerns of crop deterioration, the funds are short and been forced to cover.
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