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Production prospects for corn continue to decline, but even if ending stocks fall to nearly 2.4 BB, as many expect, they would still be the second highest in over 20 years. Global stocks are falling as well but remain elevated. That said, for corn values to trend upward, it is important for exports to improve. Last week, export inspections were mundane at 30.7 MB. However, values in China are at a 5-year high and expectations are they may have a production shortfall of 20-30 million tons because of flooding. If so, they may have to import up to 10-12 million tons which would give U.S. export prospects a boost down the road. In other developments, the rating for corn fell one-point last week to 61 percent of the crop in good-to-excellent condition. At this point, the ratings have run their course as to being a significant influence.
Soybeans continue to trend upward amid strong demand from China. As mentioned in a previous comment, China’s imports are expected to rise 3.0 million tons, while Brazil’s exports are projected to increase 2.0 million tons. This leaves a 2.0 million gap in which the U.S. could get the lion’s share of the business. Looking at last week, export inspections were healthy at 47.6 MB with China taking 30.4 MB. In the meantime, production prospects in the U.S. are declining as well as those globally. That said, all eyes will be on South America at planting and during the growing season. In other developments, the rating for soybeans fell one-point last week to 65 percent of the crop in good-to-excellent condition. Like corn, at this stage of development, they are becoming irrelevant.
Wheat has met resistance recently from improving production prospects in Argentina and Australia. Although the U.S. has been missing out on wheat sales to Egypt, cumulative shipments are 6.6 percent above a year ago. Last week, inspections were a marketing year high at 25.5 MB with shipments on track for 1.057 BB versus USDA’s projection of 975 MB. The decline in the dollar since March has been a tremendous help. In other developments, spring wheat harvest is winding down at 82 percent complete compared to the average of 87 percent.
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