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Corn has been under intense pressure from ideas that weather is improving while inflationary fears are receding. The later can be seen from the long liquidation of the traditional, or trend following funds, with their position falling 57 percent from the high posted in March at 1.620 BB. Meanwhile, the longs of the index funds have fallen 14 percent. Right now, the bears seem a bit overzealous as the corn rating fell 3 points last week to 64 percent of the crop in good-to-excellent condition. This leaves little weather premium. According to Ag Watch’s yield model, the national yield is 175.2 bpa versus USDA’s estimate of 177.0 bpa. In other matters, exports are struggling with inspections last week at 26.6 MB, their lowest since mid-November. Since early April, the pace has fallen 28.6 percent while shipments to China are down 40.8 percent. USDA projects exports of 2.450 BB, but we are currently on track for 2.275 BB.
Soybeans have taken a beating from ideas of improving weather and easing of inflationary concerns. Lessening of inflationary concerns can be seen from the long position of the traditional, or trend following funds, falling 58 percent from the peak set in March at 725 MB. Meanwhile, the longs held by the index funds have declined 17 percent. Last week, the soybean rating fell 2 points to 63 percent of the crop in good-to-excellent condition and compares to 59 percent a year ago. According to Ag Watch’s yield model, this translates to a national yield of 51.9 bpa versus USDA’s estimate of 51.4 bpa. In other developments, exports are struggling with inspections last week at 13.0 MB. USDA projects exports of 2.170 BB, but they are currently on track for 2.055 BB.
Wheat tumbled this week from the sell-off in corn and soybeans in addition to strength in the dollar. The strength in the dollar has been a sore sport for exports for some time as inspections last week were a marketing year low of 4.1 MB. In other matters, winter wheat harvest is progressing at 54 percent complete compared to 43 percent a year ago and 48 percent for the average. Because of improved weather in the upper Midwest, the rating for spring wheat jumped 7 points to 66 percent of the crop in good-to-excellent condition.
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