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The rally in corn is still going strong. Robust exports and dryness in Brazil are the supporting factors. After a brief slump, the pace of shipments has recovered. Inspections last week were the second highest of the season at 84.2 MB. China took the lion’s share of shipments. In other developments, significant planting progress was made last week with 46 percent of the crop planted compared to the average of 36 percent. Above normal moisture is forecast in the Midwest over the next 10 days along with cooler temperatures which could impact emergence. Right now, the bulls are upbeat, but beware, the market is not made out of Teflon. While the fundamentals are positive, keep an eye over your shoulder, as increasing geopolitical uncertainty and the deteriorating social mood could change the landscape in an instant.
Soybeans are generally the king of the grains but have been a follower of corn the past few weeks. Harvest in Brazil is finished with a record crop being forecast. China has been largely absent in making purchases, only taking token shipments since early April. Last week, export inspections were a marketing year low of 5.2 MB. Since November, the pace of shipments has fallen 91 percent. The factor that has been supporting the market is that stocks are their tightest in 8 years. In other developments, planting is progressing quickly at 24 percent complete versus the average of 11 percent. While traders are bullish because of tight stocks, the decline in exports suggests that a weather event this season will probably be needed to sustain the rally much longer.
Wheat is searching for a direction and is mostly following corn. The rating of the winter crop fell one-point last week to 48 percent in good-to-excellent condition and is below last year’s rating of 55 percent. Cool, wet conditions that are forecast over the next several days should offer support. In other developments, planting of the spring wheat crop is progressing quickly at 49 percent complete compared to 32 percent for the average. Looking at exports, they are run of the mill with inspections last week at 18.7 MB. We must ship 27.0 MB each week to reach USDA’s projection of 985 MB. Currently, shipments are on track for 948 MB. Wheat may be underpinned from corn a while longer but needs fresh input to move higher.
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