On The Money Grain Commentary 9-28-23

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Corn Outlook:

The bulls may not find many gold nuggets in corn, at least for now, as harvest is getting into full swing and exports are sluggish. As of last week, fifteen percent of the crop has been harvested compared to 11 percent a year ago, and 13 percent for the average with good yields being reported in the east. Meanwhile, exports are a concern. Although the USDA projects a 23 percent increase from a year ago at 2.050 BB, and cumulative shipments are up 6 percent, reaching their target may be ambitious. Last week, inspections were 26.0 MB and must average 40.2 MB each week for USDA’s projection to be achieved. However, the dollar has risen over 6 percent since July which poses a headwind. The bottom line is that achieving USDA’s target will be a challenge unless there is sharp weakness in the dollar, or a crop threat arises in South America.

Bean Outlook

The greatest hurdles facing soybeans for the 2023-24 season are the prospects for a record crop in Brazil, along with an increase in their exports. Over the past 3 years, their exports have risen 22.7 percent while those in the U.S. have fallen 16.7 percent. Inspections last week were 17.6 MB, which was well below the average of 35.5 MB that must be shipped weekly to reach USDA’s target of 1.790 BB. It is early in the marketing year but, so far, our weekly average is only 14.3 MB. While shipments to China have improved recently, their primary source for soybeans will continue to be South America. Meanwhile, harvest is progressing slightly ahead of schedule at 12 percent complete compared to 7 percent a year ago and 11 percent for the average.

Wheat Outlook:

Unrest remains in the Black Sea Region as Ukraine and Russia continue to slug it out. While the conflict has underpinned values recently, traders are accepting the turmoil as the norm. Meanwhile, export inspections last week were a marketing year high at 17.6 MB, and above the average of 13.6 MB that must be shipped weekly to achieve USDA’s projection of 700 MB. Currently, we are running slightly above the pace needed to reach their target. In other matters, winter wheat planting is running slightly behind schedule at 26 percent complete compared to 30 percent a year ago and 29 percent for the average.

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