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Following the release of the September Crop Report this week, which was in line with estimates, the focus in corn should begin to gravitate from supply to demand. In the meantime, harvest is getting underway and is 5 percent complete. As it progresses, questions regarding yield and supply will be answered. Early reports from producers in the southern periphery of the Corn Belt are mentioning yields of 200 bpa. In the meantime, demand is a concern, especially with export inspections for the first week of the marketing season at 24.5 MB. With sluggish demand, and ending stocks of 2.221 BB, the highest since 2016, there is not much chance that we will run out of corn anytime soon.
Weather as a factor in soybeans will soon end as 20 percent of the crop is dropping leaves. That said, interest will be on South America, China, and exports in the months ahead. As it stands now, Brazil’s plantings are expected to be 3 percent more than a year ago with some sources forecasting a record crop of 164.0 million tons versus USDA’s estimate of 163.0 million tons. Right now, the unknown factor is China. The USDA has increased their import estimate by 1.0 million tons, but their weakening economy poses a headwind, and raises some questions. Meanwhile, export inspections for the new marketing year are off to a slow start with inspections last week of 11.3 MB. Previous comments have mentioned that we need to see them averaging 30-35 MB on a weekly basis by early October, as shipments tend to peak in November.
Wheat remains in a downtrend, but there may be a silver lining as world stockpiles have fallen for the fifth consecutive year to 258.6 million tons. This is because of production declines in Argentina, Australia, Canada, and the EU. Meanwhile, Russia’s exports are growing, up 1.0 million tons, and Ukraine is finding alternative routes for shipping stemming from the hostilities. Looking at U.S. exports, inspections last week were 14.9 MB and above the average of 13.8 MB that must be shipped weekly to reach USDA’s target of 700 MB. In other matters, spring wheat harvest is 83 percent complete, while winter wheat planting is underway, and 9 percent done.
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