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With weather having passed as a factor in corn, the focus will now turn to harvest progress, yield reports, exports, and South America. Harvest has begun in some areas and is 4 percent complete compared to the average of 5 percent. Meanwhile, we are still seeing the impact from the disruption in the Gulf left by Hurricane Ida, as export inspections for the first full week of the marketing year were only 5.440 MB. This is a disappointing start for the season as the USDA projects exports to be up 150 MB from August. Looking at South America, planting in Brazil has begun and is 10 percent complete. Longer-term, while domestic stocks-to-usage rose slightly from August, they are still tight which should continue to offer support.
While ending stocks of soybeans rose 30 MB to 185 MB in the September report, stocks-to-usage remain extremely tight at 4.2 percent. This suggests that South America must produce an adequate crop to meet existing demand. While global stocks are sufficient, that could change if a problem arises with the crop that will soon be planted in Brazil. Meanwhile, exports are off to a sluggish start for the first week of the marketing year because of the disruption created by Hurricane Ida. Last week, inspections were only 3.8 MB. USDA projects exports to be up 35 MB from the August report which means they have a lot of catching up to do.
Ending stocks of wheat continue to decline and are their lowest since 2016 at 615 MB. However, global stocks remain elevated even though they have fallen the past two years. Meanwhile, exports are an issue as they have been slipping since 2016 with Russia being one of our staunchest competitors. Last week, inspections were 20.1 MB and above the average needed to reach USDA’s projection of 875 MB. In other developments, winter wheat planting is getting underway and is 12 percent complete compared to the average of 8 percent.
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