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Corn Outlook:
Hopes were running high last week that a trade deal with China involving ag products might be announced when President Trump and Xi talked during their virtual meeting. However, that did not happen, which was a huge let down for the grains. Meanwhile, corn harvest is getting into full swing and is 11 percent complete which is par for the average. While expectations are the USDA might lower their yield estimate next month, we are still looking at a big crop which puts demand in the spotlight. There will be little help from feed consumption as cattle numbers are down 173,000 from a year ago, implying that exports will have to shoulder the load. Last week, inspections were 52.3 MB and below the average of 57.9 MB that must be shipped weekly to meet USDA’s projection of 2.975 BB. Right now, the overall pace is running slightly below the mark needed to reach their target. The bottom line is, to sustain current values, exports cannot falter.
Bean Outlook
Failure of an announcement in the meeting last week between President Trump and Xi broadsided the soybean market, which has carried into this week. China has been our largest customer and, so far, they have not received a shipment from the U.S. since early June. Currently, their needs through December have been met from Brazil. With Conab increasing Brazil’s production 1.8 million tons to 171.4 million, the outlook is challenging. Last week, export inspections were 17.7 MB and must average 33.3 MB each week to meet USDA’s target of 1.685 BB. If the current pace continues, we will ship 1.053 BB. The bottom line is there has been an increase in exports to our other trading partners, but without China, a big hole exists. As it stands now, purchases by them hinge on the removal of tariffs. In other matters, harvest is getting underway, and 9 percent complete which is par for the average.
Wheat Outlook:
There is little fresh news in wheat. Planting of the winter crop is in full swing and is 20 percent complete compared to the average of 23 percent. Exports have been exceptional, so far, but they have offered little support. This is mostly because of the International Grains Council increasing global production 8.0 million tons to 819.0 million. Last week, export inspections were 31.3 MB and well above the average of 16.1 MB that must be shipped weekly to meet USDA’s projection of 900 MB. The bottom line is there will probably be little interest in the market until the crop is planted, and weather becomes more of a factor.
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