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Until the USDA Acreage Report is released at the end of the month, the focus in corn will be on the twists and turns in the Ukraine-Russia conflict, plus weather and growing conditions. The forecast through mid-month leans to cooler, wetter conditions, and is considered nonthreatening. This, along with fund liquidation, was behind the sell-off early this week. Planting is catching up and is 86 percent done versus the average of 87 percent. However, the window is closing for Minnesota and North Dakota as they are at 82 percent and 27 percent done respectively. This puts 1.7 million acres in limbo for another crop. Meanwhile, exports were disappointing with inspections last week at 54.7 MB. Deliveries to China were 268,818 million tons, which was the smallest shipment to them in 3 weeks. Since late March, the pace of shipments to them has fallen 16.7 percent. Look for volatility to persist in corn as there are a lot of moving parts on the table.
Soybeans have been underpinned from strength in palm and vegetable oil but ran into a headwind this week from end of the month position squaring by the funds. In addition, be aware that oil led rallies are not the strongest source of support because oil is the smallest component of the crush with meal the largest. Great strides were made in planting last week as it is 66 percent complete compared to the average of 67 percent. Exports were disappointing with inspections of only 13.8 MB, their smallest since mid-September. Meanwhile, China cooled off considerably taking a token 2.3 MB. These factors, coupled with a potential large increase in planted acres, means that the bulls will need adverse weather to keep the price trend moving higher.
A few weeks ago, wheat was the star performer of the grains because of the disruption of exports created by the Ukraine-Russia conflict. Last week, Russia said that they would allow shipments of Ukraine grain from Black Sea ports in exchange for the easing of sanctions. This raised eyebrows. However, Russia has repeated their intentions which sent wheat tumbling early this week. Be advised that they will likely stay a step ahead of the sanctions. Meanwhile, the rating of the winter wheat crop rose one point to 29 percent in good-to-excellent condition. Spring wheat planting has been lagging for weeks and is still behind at 73 percent complete versus 92 percent for the average. Look for volatility in wheat to stay on the upswing.
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