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The first look at USDA’s 2021-22 ending stocks estimate of 1.507 BB for corn was more than traders anticipated. This was the reason behind the 40-cent limit decline on Thursday as the bulls were pumped up before the report. Meanwhile, weather looks to be beneficial through late May with no major threats on the horizon. However, June-July is always a wild card. Planting is progressing rapidly and is 67 percent complete compared to 52 percent for the average. With the crop going into the ground quickly, chances are for increased acres and above average yield potential. Looking at exports, they remain strong with inspections last week at 67.2 MB. China took the biggest share of shipments. However, there may be some cracks developing as shipments to them fell 4.2 percent last week. If they are down again next week, it will be a sign that their imports could be peaking. It is no secret that if shipments to China fade, so goes the rally in corn.
Soybean stocks for 2021-22 are projected to be up slightly at 140 MB but will remain tight. Meanwhile, planting is running at great guns with 42 percent of the crop in the ground versus 22 percent for the average. If weather holds out through the rest of the month as forecast, an increase in acres is likely. While bullish sentiment in soybeans has reached the stratosphere, exports have been on the downswing. Inspections last week were up slightly at 8.7 MB, but China was barely visible. They have kept a low profile for the past 6 weeks. As mentioned in previous comments, when soybean exports peak, the pace generally falls somewhere in the range between 65-85 percent through the end of the marketing year. So far, this season, it has declined 92 percent. For months, the bulls have been in a frenzy, but payback is coming!
Wheat does not have much of a story unless weather becomes a factor. Last week, the rating improved one-point to 49 percent of the crop in good-to-excellent condition. This compares to the rating of 53 percent a year ago. The improvement of weather in the upper Midwest allowed for rapid progress in planting of the spring crop as it is 70 percent done compared to the average of 51 percent. Looking at exports, inspections last week were up slightly to 20.0 MB with the pace of shipment mostly steady the past 4 weeks.
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