On The Money Grain Commentary 5-26-22

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Corn Outlook:

The sun is setting on planting the remainder of the corn crop. Great strides were made last week with 23 percent of the crop going in the ground with progress now at 72 percent complete. However, it lags 89 percent of the crop planted a year ago, and the average of 79 percent. Meanwhile, only 60 percent of Minnesota’s planting is finished while just 20 percent is done in North Dakota. This puts approximately 3.6 million acres in limbo of being switched to another crop. In other developments, export inspections last week were a marketing year high of 66.8 MB. China received 792,998 million tons, their highest of the season. With strong exports, and planted acres a question mark, the fundamentals remain positive. In the meantime, be advised that interest rates at zero percent for over a decade has created a bubble in the financial markets, real estate, as well as commodities that is probably not far from bursting.

Bean Outlook:

Soybeans have been resilient even though the fundamentals are the least positive of the grains. The factor supporting the market is the strength in vegetable oil. However, a potential increase in acres because of late planting in corn looms. Meanwhile, soybean planting is behind at 50 percent complete versus 73 percent a year ago and 55 percent for the average. Although there is a longer window for planting soybeans, there are concerns of a yield loss and the impact of an early frost. In other developments, export inspections last week were mostly run of the mill at 21.1 MB with China taking a token 5.9 MB. Shipments to them have declined 89.3 percent since peaking last November. Little improvement is likely as long as the Covid lockdown continues.

Wheat Outlook:

Volatility in wheat remains high as it is torn between opposing forces. One is that a large crop is forecast in Russia, but a smaller one in Ukraine because of the conflict. Also, Russia is willing to negotiate terms for reopening Ukraine ports in return for easing sanctions. It will be interesting as to how long that situation will last. Meanwhile, a subpar winter wheat crop is forecast in the southern Plains while planting of the spring crop is lagging at 49 percent complete compared to the average of 83 percent. Looking at exports, inspections last were nominal at 11.3 MB with the pace barely on track to reach USDA’s target of 775 MB. Because of conflicting issues and erratic swings, volatility will likely persist.

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