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The conflict between the U.S. and China continues to weigh on the grains. Not only have the grains felt the pain of the trade war, other raw materials have as well as reflected by the Bloomberg Commodity Index sinking to a two-year low. Meanwhile, the corn crop is well behind in development with only 41 percent in the dent stage versus the average of 63 percent. Illinois, Indiana, Minnesota, Ohio, and South Dakota are running 30 percent or more below their average. In the meantime, the rating improved one-point to 58 percent of the crop in good-to-excellent condition. According to Ag Watch’s yield model, this equates to a national yield of 167.7 bpa versus USDA’s estimate of 169.5 bpa. Meanwhile, inspections for the last full week of the marketing year were a season low of 13.9 MB. This is corn’s albatross, the decline in usage.
Soybeans are behind in development, but weather is favorable for the next several days. Furthermore, there are no frost threats for the next two weeks. Currently, 86 percent of the crop is setting pods which trails the average of 96 percent. Indiana is lagging the most, down 21 percent from its average. The crop rating stood unchanged from a week ago at 55 percent in good-to-excellent condition. According to Ag Watch’s yield model, this translates to a national yield of 49.0 bpa compared to USDA’s estimate of 48.5 bpa. Looking at inspections for the last week of the marketing year, they were strong at 47.0 MB. China took a healthy 28.6 MB. Since January, their average shipment has been 13.0 MB. However, getting back to the days prior to the trade war when they took 15-30 MB is wishful thinking.
Wheat continues to be pressured from record global stockpiles and no production threats on the horizon with our competitors. Export inspections last week were 19.3 MB and above the average needed to reach USDA’s projection of 975 MB. If the pace holds up, their target could rise to over 1.0 BB. With ending stocks at 1.014 BB, wheat needs all the help it can get. In other developments, spring wheat harvest lags at 55 percent completed compared to the average of 78 percent.
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