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It seems that the focus in grains changes daily between concerns of a recession and weather. In my opinion, I do not believe that a recession can be avoided because of fiscal irresponsibility by Congress, and over a decade of the Fed keeping interest rates at nearly zero percent. Looking at weather, portions of the Midwest are forecast to see near to above normal rainfall into next week but will be accompanied by extreme temperatures through the end of the month. With 37 percent of the corn crop in the silking stage compared to 48 percent for the average, regions that miss the moisture could see their yields affected. Meanwhile, the corn rating has managed to stay at 64 percent in good-to-excellent condition for 3 consecutive weeks. In other matters, export inspections were up last week at 42.2 MB, but the pace of shipments are down 34.8 percent since early April. The bottom line in corn is that while there is little tolerance for a weather mishap, recent scattered showers has squashed bullish enthusiasm.
Those looking for a weather rally in soybeans are being disappointed even though high temperatures lie ahead through the end of the month. Last week, the crop rating fell one-point to 61 percent in good-to-excellent condition but is still above the year ago rating of 60 percent. While areas short on moisture could see their yields effected, buyers are reluctant to step up to the plate because of recent scattered showers. In other developments, exports inspections were marginal last week at 13.3 MB with China barely present taking only 5.0 MB.
Wheat futures found support early this week from weakness in the dollar and the heat wave in Europe. However, weakness in the row crops and reports of Russia increasing their production 1.7 million tons will likely limit gains. Export inspections were lean last week at 6.8 MB and must average 16.0 MB each week to reach USDA’s target of 800 MB. In other developments, winter wheat harvest has progressed to 70 percent complete which is one-point below the average. The rating of the spring crop improved one-point last week to 71 percent in good-to-excellent condition.
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