On The Money Grain Commentary 9-26-19

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Corn Outlook:

Optimism is growing that the high-level trade meeting between the U.S. and China in early October could result in a resolution that ends the dispute between the two powers. However, we have been down this road before only to be disappointed. In the meantime, corn harvest is getting underway but is slow to progress at 7 percent done compared to the average of 11 percent. This is because of lagging crop maturity. While yields and harvested acres are still an unknown, exports may be a greater concern as inspections last week were the lowest since 2012 at only 9.2 MB. Currently, the export pace is the slowest since 2014. In the meantime, the U.S. share of global exports has fallen from 41.6 percent to 30.6 percent in the past three years. This is clearly a wake-up call to the ag sector. We must create greater demand and attract speculative interest.

Bean Outlook:

Traders are hopeful that next month’s meeting with China will lead to increased soybean sales. Exports are off to a decent start for the marketing year with inspections last week at 33.8 MB. Since May, the pace of shipments has risen 88 percent. However, getting back to the levels prior to the trade war is unlikely as Brazil commands 50 percent of the global share of exports, and that is unlikely to change. In other developments, the crop continues to lag in maturity with only 34 percent dropping leaves compared to the average of 59 percent. While frost is not a concern for the moment, one could put a dent on the yield in Illinois, Indiana, and Ohio as they are running 42 percent, 38 percent, and 43 percent below their average.

Wheat Outlook:

News in wheat is limited with the market following the direction of corn and soybeans. Winter wheat planting is underway and is 22 percent done compared to the average of 24 percent. Once it is complete, crop conditions will be monitored closely. Meanwhile, spring wheat harvest is winding down at 87 percent done. Looking at exports, inspections last week were 17.4 MB and must average 18.9 MB each week to reach USDA’s target of 975 MB. Right now, shipments are on track for 913 MB. Weather in Ukraine, southern Russia, and Australia may start getting attention as they are experiencing dry conditions.

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