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Corn futures recently hit a snag from China’s intentions to put the brakes on commodity speculation as well as greenhouse type conditions that are forecast through the first week of June. Meanwhile, the long-range forecast for June-July-August currently shows no threatening conditions. However, these issues were shrugged off Thursday which led to a strong recovery. Looking at exports, inspections last week were below the previous week at 68.0 MB with China taking the lions share of shipments. Meanwhile, there was a downtick in the overall pace of shipments which needs to be monitored for signs of a peak. Lately, the funds pulled in their horns as they have trimmed 580 MB of their long position since mid-April. Long story short, too many bulls may have jumped on the bandwagon expecting rampant inflation.
Not much has developed in soybeans of late other than planting is progressing at a rapid pace, and there are no threatening conditions in the forecast for the next couple of weeks. As of last week, 75 percent of the crop was in the ground compared to 63 percent a year ago and 54 percent for the average. The crop is ahead in development with 41 percent having emerged versus the average of 25 percent. Meanwhile, exports are lethargic. Inspections last week were 7.1 MB, the third lowest of the season. Shipments to China were barely noticeable. At the current pace, exports may struggle to reach USDA’s target of 2.280 BB. In the meantime, the bulls are losing enthusiasm as they have liquidated 170 MB of their long position over the past 3 weeks.
Wheat has been facing a headwind from the approaching harvest and improving conditions in Europe and Australia. Meanwhile, the rating for the winter crop dropped one notch last week to 47 percent in good-to-excellent condition and compares to 54 percent a year ago. In other developments, exports have no bragging rights as inspections last week were below the previous week at 21.0 MB. With only a couple of weeks left in the marketing year, it could be a photo finish in reaching USDA’s target of 965 MB.
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