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The window is closing for planting corn because of crop insurance deadlines. It is at a record slow pace of 67 percent complete compared to the average of 96 percent. Illinois, Indiana, Ohio, and South Dakota are behind the most and have yet to plant 13.2 million acres. Meanwhile, traders are in a quandary because of the looming June 10th deadline for the Trump Administration to impose a 5 percent tariff on imports from Mexico. Be aware that Mexico is the largest buyer of U.S. corn. In addition, there are rumors of Smithfield importing corn from Brazil. These conflicting issues muddies the water causing the bulls to have second thoughts. Meanwhile, another issue that is not getting much attention is the export pace has fallen 25 percent in the past five weeks. Last week, inspections were a modest 29.2 MB.
Soybean planting continues to lag with only 39 percent of the crop planted compared to 79 percent for the average. While the situation is not as critical for soybeans as it is for corn, there are concerns of below average yields. However, offsetting this is the potential switching of acres from corn, the trade war with China, expectations that global demand will decline because of African Swine Fever, and Brazil waiting in the wings. Last week, export inspections were a modest 18.3 MB and below the average needed to reach USDA’s projection of 1.775 BB. At the current pace, shipments are on track for 1.5 BB. This is not supportive of a bright longer-term outlook.
I cannot recall when I have seen the crop rating for wheat slide 5 points one week and rebound 3 points the next. However, that is what happened last week when the ratings rebounded to 64 percent of the crop in good-to-excellent condition. Meanwhile, cooler, wet conditions are forecast in the Plains which could cause a drop in the ratings next week and raise quality concerns. In the meantime, export inspections closed the marketing season last week at 21.7 MB with cumulative shipments of 910 MB. Concerns of dry weather in Russia spurred Thursday’s strength.
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