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Unless weather intercedes this growing season, corn faces an uphill struggle because of ending stocks of 3.3 BB, the largest since 1987, and demand destruction created by the coronavirus. Although segments of the economy are beginning to reopen, it will be a long time before it recovers, probably longer than we can fathom. Meanwhile, there are some bright spots. Crude oil appears to have bottomed, and while the USDA projects corn usage declining 3.2 percent this season, a rebound of 7.0 percent is forecast for 2020-21. In other developments, planting is progressing quickly at 67 percent complete versus the average of 56 percent. Export inspections last week were a marketing year high of 52.4 MB. While corn is currently faced with a gloom and doom outlook, one thing is for certain, the impact of the coronavirus has instilled the fact that during a crisis, governments must maintain an adequate food supply, or face civil unrest.
Optimism for soybeans is slowly emerging because of active purchases by China since the first of the month and shrinking stockpiles. Global stockpiles are forecast to decline 1.9 percent from a year ago setting a five-year low. While the USDA has lowered exports this season and raised ending stocks to 580 MB, usage for 2020-21 is projected to rise 10.6 percent with ending stocks falling to 405 MB. Right now, the big unknown for soybeans is how many acres will be switched out of corn because of ethanol plant closings. In other developments, planting is proceeding at a fast clip and is 38 percent complete compared to the average of 23 percent. Looking at exports, inspections last week were 18.2 MB.
Wheat faces a headwind from USDA’s forecast of world stocks for 2020-21 rising 5.1 percent to 310.1 million tons, a record high. In addition, global competition will remain intense as exports are expected to fall to 950 MB. Inspections last week were nominal at 12.5 MB. In other developments, the rating for winter wheat fell 2 points to 53 percent of the crop in good-to-excellent condition. This compares to last year’s rating of 64 percent. Meanwhile, conditions in Europe and the Black Sea Region are improving.
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