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Corn values have fallen so low that binoculars are needed to see the top of the well! The bears are teeming with confidence as corn and crude oil are near historic lows, the ethanol industry is in shambles because of the nationwide shutdown with many plants are closing. Ethanol comprises 38 percent of corn usage. In other developments, planting is progressing ahead of schedule at 27 percent complete versus the average of 20 percent. Export inspections last week were 42.4 MB and must average 47.0 MB on a weekly basis to reach USDA’s projection of 1.725 BB. Looking ahead, while it looks gloom and doom for corn, we have just entered the growing season and uncertainties are ahead. What would knock the bears out of their comfort zone is China coming off the bench with an unexpected purchase.
Recently, China made three purchases of soybeans, but it barely moved the needle of the market. With Brazil’s harvest complete and available for export, additional positive input will be needed to push values higher. Right now, very little is available with the market focused on the coronavirus and reopening of the economy. Meanwhile, planting has begun with progress running ahead of schedule at 8 percent complete compared to the average of 4 percent. Export inspections last week were 20.4 MB and must average 30.2 MB each week to reach USDA’s target of 1.775 BB. For now, the question facing soybeans is with the ethanol industry being devastated, will more acres be planted in soybeans?
Wheat was lower this week but, overall, it is underpinned from Russia suspending exports next month and declining conditions of the winter crop in the U.S. Last week, the crop rating fell 3 points to 54 percent in good-to-excellent condition. Spring wheat planting is underway but running behind schedule at 14 percent completed compared to the average of 29 percent. Looking at exports, inspections last week were mundane at 18.4 MB and must average 31.6 MB to achieve USDA’s target of 985 MB. Unless they improve significantly in the next few weeks, we are on track for shipments of 915 MB.
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