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Corn Outlook:
The selling in corn has run its course for now even though not much positive news is to be found. Weather looks non-threatening for the next couple of weeks, sources in Brazil have raised their production estimate, the export pace is declining, and the funds are adding to their shorts. Meanwhile, planting is winding down with the latest crop rating showing 69 percent of the crop in the good-to-excellent category, up one point from a week ago, but down from last year’s rating of 75 percent. According to Ag Watch’s yield model, this equates to a yield of 175.9 bpa compared to USDA’s estimate of 181 bpa. Looking at exports, inspections last week were 62.0 MB and above the average needed to meet USDA’s target of 2.6 BB. However, the pace of shipments has fallen 12 percent since the third week of April and is barely on track to meet their projection. The bottom line is the funds bearish grip may be hard to shake unless the negative landscape changes.
Bean Outlook
President Trump and China have been at odds recently, each pointing fingers and calling the other names for failing to live up to the trade agreement. While Trump and Xi talked on Thursday, details of their conversation were lacking other than pledging more trade talks. This could turn into a drawn out affair. Meanwhile, planting is progressing quickly at 84 percent complete compared to 77 percent a year ago and 80 percent for the average. The first rating of the season shows 67 percent of the crop rated in good-to-excellent condition. Looking at exports, inspections last week were barely heartbeat at 9.8 MB, and well below the average of 16.2 MB that must be shipped weekly to meet USDA’s target of 1.850 MB. China took 2.3 MB, their first shipment since the end of April. The bottom line in soybeans is that positive news is lacking to support sustained gains.
Wheat Outlook:
Wheat is being underpinned from the funds beginning to cover their short position, and concerns that recent wet conditions in the Plains may cause quality issues at harvest. Harvest has just begun and is 3 percent complete. Meanwhile, the recent drone attack by Ukraine in Russia is creating uncertainty surrounding exports in the Black Sea region. Looking at exports, they have improved recently with inspections last week of 20.3 MB.
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