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When May rolls around all eyes turn to weather and supply. However, no one is looking at weather now because of demand brought to its knees from the economic shutdown. This is evident from railcar loadings of grain down 6.6 percent from a year ago. In the meantime, corn planting is progressing at rapid speed and is 51 percent complete compared to the average of 39 percent. So, why worry about supply? Well, the crop is not in the bin, and China will need corn to rebuild its hog industry. Regarding exports, inspections were strong last week at 47.9 MB, barely above the average needed each week to reach USDA’s projection of 1.725 BB. While the fundamentals of corn currently do not offer much incentive for the bulls, the funds are sporting a short position of 1.070 BB. While not near a record, in the event they cover it could trigger a decent recovery.
Soybeans values have gone nowhere the past few weeks as the economy is at a standstill because of the shutdown. Increased tensions between the Trump Administration and China regarding the coronavirus, has given rise to the possible ditching of the Phase I trade agreement. While the agreement may be on shaky ground, China will need to purchase soybeans to rebuild stockpiles. Meanwhile, most of their needs will likely come from Brazil as reflected by the decline in exports. Last week, inspections swept the bottom of the barrel at only 11.6 MB. In the meantime, Brazil’s exports during April were a record 16.3 million tons. In other developments, planting is progressing quickly at 23 percent complete versus the average of 11 percent.
Wheat has met a recent headwind from showers in Russia and Ukraine relieving some crop stress. However, more is needed. Meanwhile, the winter crop in the U.S. saw a one-point improvement to 55 percent in good-to-excellent condition. Planting of the spring wheat crop is lagging at 29 percent complete compared to the average of 43 percent. Looking at exports, inspections last week were 19.6 MB and must average 34.5 MB the next four weeks to reach USDA’s projection of 985 MB. Currently, they are on track for 924 MB.
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