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After beginning the week on a strong note, corn futures have since backed off. With global supply more than adequate, plus an open window for harvest, the bulls need more positive input for sustained price improvement. In other developments, the Federal Reserve announced at their quarterly meeting this week that they would continue to keep interest rates near zero percent. Rates have stayed at this level since 2009. Harvest is just beginning and is 5 percent complete compared to the average of 9 percent. Early yield results will be monitored closely for comparison against USDA’s estimate. Export inspections for the first full week of the new marketing year were disappointing at 27.9 MB. Last week, the trend following funds reversed from a long position of 80 MB to a short of 115 MB.
Soybeans found support early this week from a decline in the crop rating. The rating fell 2 points to 61 percent of the crop in good-to-excellent condition. This was the first decline following 6 weeks of a steady rating. However, the market needs more positive input to spur further gains as harvest is just around the corner and planting in Brazil will soon get underway. Thirty-five percent of the crop is dropping leaves compared to 39 percent for the average. While economic news out of China has been negligible recently, they are being watched closely for further deterioration. Export inspections for the first full week of the new marketing year were 13.6 MB. Last week, the trend following funds lightened their short position 15 MB to 175 MB. Until harvest gets into full swing and yield results are available, fresh news in soybeans will be limited.
Wheat managed a strong bounce on Monday from frost in Brazil over the weekend . However, the market has since stalled and additional gains will be difficult to come by as there is no shortage of global stocks. USDA just recently increased their production estimate for the EU by 6.3 million tons and 4.0 million tons in the Black Sea region. Keep in mind that U.S. wheat is already overpriced in the global market. Last week, export inspections were better than expected at 23.7 MB and above the average needed to reach USDA’s projection of 900 MB. However, this was only the third time this season that they have been above the average needed to reach their target. In other developments, winter wheat planting is on par with the average of 9 percent. Last week, the trend following funds increased their short position 95 MB to 425 MB.
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