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Corn Outlook:
The rapid pace of planting at 87 percent complete versus 81 percent a year ago and 85 percent for the average posed a headwind for corn this week. In the first weekly crop report of the season, sixty-eight percent of the crop is rated in good-to-excellent condition which is the poorest start since 2019. Expectations were that it might have been closer to 75 percent. However, the market failed to see a positive reaction which was a disappointment to the bulls. Looking at exports, inspections last week at 54.5 MB fell below the previous week. Shipments to Mexico, our largest customer, were the smallest seen in over two months. Since the third week of April, the overall pace of shipments has fallen 11 percent. The bottom line in corn is that if the export pace is peaking, weather will have to assume a greater role in attracting bullish interest.
Bean Outlook
Optimism that the EPA will announce new blending rules for biofuels has apparently run its course as soybeans turned lower this week. Bear in mind that the biggest component in crushing soybeans is meal, 48 pounds in a 60-pound bushel compared to 11 pounds of soyoil. If soybeans are acquired for soyoil, stockpiles of meal will grow creating an oversupply. Meanwhile, planting is progressing at a rapid pace at 76 percent complete compared to 66 percent a year ago and 68 percent for the average. Looking at exports, inspections last week of 7.1 MB were a marketing year low for the second week in a row. China was a no show for the third consecutive week. The bottom line in soybeans is that demand for soyoil will only offer limited support for soybeans until meal stocks become burdensome.
Wheat Outlook:
Rainfall in the Plains, as well as in Europe and Russia weighed on wheat this week. The crop rating fell 2 points last week to 50 percent in good-to-excellent condition but only offered modest support. However, export inspections of 20.6 MB last week were firm. Right now, the most encouraging factor for wheat is the funds are short 500 MB but may be slow to cover with harvest just ahead.
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