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What once was thought to be a record corn crop in the making is on track for being average. Last week, crop conditions fell 2-points to 62 percent rated in good-to-excellent condition. According to Ag Watch’s yield model, this equates to a national yield of 169.1 bpa compared to USDA’s projection of 181.8 bpa. If realized, ending stocks could fall to 1.655 BB. In 2014 and 2015 when stocks were similar, corn futures ranged between 318-438 with the median at 378. In other developments, export inspections for the last full week of the marketing year were miserable at 15.8 MB. The bottom line for corn is that stocks are adequate, but declining production prospects will keep the bears honest. However, an increase in exports, or a weather issue in South America, will be needed to draw the bulls’ interest.
Production prospects in soybeans are declining and probably getting more attention than corn because of purchases by China. Last week, the crop rating slid 3-points to 66 percent in good-to-excellent condition. According to Ag Watch’s yield model, the national yield is 49.8 bpa versus USDA’s estimate of 53.3 bpa. If realized, ending stocks could fall to 305 MB which would be snug. In 2016, we had similar stocks and soybean values ranged between 849-1208 with the median being 1028. If ending stocks are close to 305 MB, planting and crop conditions will certainly be in the spotlight in South America. In other developments, export inspections last week were 29.5 MB for the last full week of the marketing year.
Wheat has mostly been a follower of corn and soybeans but has also been supported from dryness in much of Ukraine and Russia as well as dollar weakness. In other developments, spring wheat harvest is lagging at 69 percent complete compared to the average of 77 percent. Export inspections last week were 18.9 MB and slightly above the average needed to reach USDA’s target of 975 MB. Currently, they are on track for 940 MB.
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