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In the weeks ahead, the focus in corn will center on harvest progress, yield reports, and exports. As of last week, harvest was 8 percent done which is slightly below the average of 10 percent. The forecast is dry through early October which will keep delays at a minimum. Looking at exports, USDA projects them at 2.325 BB for an increase of 31 percent over a year ago. Last week, inspections were 29.7 MB and must average 45.8 MB each week to reach USDA’s target. While global stocks have been declining since 2016, they are more than adequate to meet demand. This suggests that a production shortfall will be needed in South America or the Black Sea Region to sustain prolonged price strength.
Soybeans continue to be supported from active buying by China. Hardly a day passes that a sale is not announced. Last week, export inspections were 48.1 MB with China taking 32.6 MB. Their interest will likely last a few more weeks but will likely turn to South America when planting begins. Generally, U.S. exports tend to peak in November. Looking at harvest, it has begun and is 6 percent complete which is par for the average. Right now, my main concern for soybeans is that the funds are long 765 MB, their largest position since April 2018. Shortly after that occurred, the market fell 24 percent. Long story short, the bulls are becoming overpopulated.
There is little to say about wheat as it is mostly a follower of corn and soybeans. Planting of winter wheat has begun and is 20 percent complete which is slightly above the average of 19 percent. Export inspections last week were 17.2 MB and must average 18.2 MB each week to reach USDA’s target of 975 MB. So far, cumulative exports are running 7 percent above a year ago with the pace on track for shipments of 1.1 BB.
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