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Corn Outlook:
Volatility in the grains has exploded because of Russia’s increased aggression in the Black Sea Region. Last week, they launched a strike against Ukraine’s port of Odessa, while, this week, they struck a port on the Danube River. This makes shipments out of the Black Sea corridor a big uncertainty. Grain can be shipped by rail or truck, but it is more expensive. The U.S. could use an increase in corn exports as they are struggling. Last week’s export inspections were only 12.2 MB, which is well below the average of 50.3 MB that must be shipped weekly to reach USDA’s target of 1.650 BB. Currently, shipments are running 205 MB below the pace necessary to meet their projection. In other matters, the crop rating was unchanged at 57 percent in good-to-excellent condition but trails last year’s rating of 61 percent. The bottom line in corn is that exports need a boost to maintain current prices.
Bean Outlook
Temperatures are sizzling which has been the factor supporting soybeans. Heat is in the forecast into early August, but normal to above normal moisture is in the mix as well. Last week, the crop rating fell one-point to 54 percent in good-to-excellent condition and compares to the year ago rating of 59 percent. While weather is the dominant focus now, there are some hurdles facing the market. The one that stands out the most is diminished exports. Last week, inspections were 10.4 MB, which was below the average of 22.7 MB that must be shipped weekly to reach USDA’s target of 1.980 BB. Currently, the pace of shipments is running 85 MB below the level needed to achieve their forecast. Another troubling factor is that China’s imports are projected to decline 2.0 million tons, while Brazil’s exports are predicted to rise 1.5 million tons. Furthermore, private sources in Brazil expect plantings to be up 2.5 percent this fall to 112.6 million acres with production rising 4.5 percent to a record 163.2 million tons. Long story short, when weather concerns pass, there may not be much to support current values.
Wheat Outlook:
For the past couple of weeks, wheat has been the benefactor of Russia’s increased aggression in the Black Sea Region which is clouding the export outlook in that area. However, grain can be shipped by rail or truck from Ukraine, but it is more expensive than ocean transport. The U.S. might reap some benefit from the escalation which is sorely needed because our exports are at an historic low. Last week, inspections were 13.1 MB, and below the average of 14.3 MB that must be shipped weekly to reach USDA’s target of 725 MB. In other matters, winter wheat harvest is poking along at 68 percent complete compared to 76 percent a year ago and 77 percent for the average. Meanwhile, the rating for spring wheat slipped 2 points to 49 percent in good-to-excellent condition and is down from last year’s rating of 68 percent.
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