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Corn Outlook:
Geopolitical issues continue to be the dominant story in grains. However, they may be losing their influence from reports that the Trump Administration and Iran are getting closer to a peace deal. If so, the fundamentals could start coming back into play. Meanwhile, corn exports last week fell below the previous week at 62.2 MB, and the average of 66.4 MB that must be shipped weekly to meet USDA’s projection of 3.3 BB. Since mid-April, the export pace has declined 8.1 percent and fallen slightly below the level to meet their target. In other developments, planting will soon wrap up and is 86 percent complete, on par with a year ago, and above the average of 83 percent. The bottom line in corn is additional positive input is needed for it to move higher.
Bean Outlook
Traders remain optimistic of a deal in which President Trump says China will increase purchases of U.S. ag products, especially soybeans. However, China is being quiet about such an agreement. As mentioned before, they have a history of not honoring them. For greater confidence in their good intentions, purchases need to be conveyed in the daily sales reporting system. Otherwise, the bulls may quickly lose interest. Currently, the index funds are long a record 1.235 BB, which could haunt the market should they liquidate. Meanwhile, export inspections last week slightly exceeded the previous week at 21.0 MB. However, the pace has been on the downswing since early February and fallen 60.7 percent. Looking at planting, it is in the final stretch at 79 percent complete versus 75 percent a year ago and 68 percent for the average. The bottom line in soybeans is with a 3.5 million increase in planted acres this spring; China needs to step up with purchases to justify current values.
Wheat Outlook:
There is not a great deal of fresh news in wheat. Harvest of the winter wheat crop begins in a couple of weeks, which will tend to limit price gains. Export inspections last week exceeded the previous week at 13.5 MB with cumulative totals for the marketing year at 862 MB, just short of USDA’s target of 900 MB.
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