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Weekly market review

By Staff | Jan 31, 2020

Export inspections for the week ending January 16th, were below last week for corn and above for soybeans. Corn came in below trade estimates at 13.6 million bushels, with Mexico as the top destination. Marketing year to date shipments are 371 million bushels, down from a large 812 million bushels a year ago. Corn is short 169 million bushels needed to hit the USDA’s target pace and the deficit is growing. The prior week corn was short 155 million bushels to hit the USDA’s target. Soybeans were slightly above trade estimates at 44.1 million bushels, China being the leading destination at 20 million bushels. Wheat was lower than last week at 16 million bushels, with Mexico as the top destination.

Even though the Phase One trade deal was signed, the market is focusing on what purchases China is going to make. China indicated they’d purchase soybeans from the U.S. according to their needs and if the price was at a level they could work with. Right now soybean harvest in Brazil is beginning and still looking to produce a record crop; as well as being cheaper than values on U.S. soybeans out of the PNW. Reports are that buying U.S. soybeans by commercial soy importers in China isn’t being set as a priority by the Chinese government. As well as China’s Vice Premier Zheng stating the trade deal with the U.S. will not hurt competition on exports from other nations. This was stated to the World Economic Forum, after complaints were voiced from other countries that weren’t part of the trade deal. This comes back to the question that the market is looking for an answer to; on how soon will purchases of U.S. goods by China happen.

Even with talks of Brazil producing a record soybean crop, there is concern of the slow harvest pace. Currently soybean harvest is at 1.8 percent compared to the 6 percent pace this time last year. The slower harvest pace also brings concerns of how the country’s second crop of corn or the Safrinha crop will be impacted. The Mato Grasso Institute of Agricultural Economics is projecting a 2 percent increase in corn acreage but a 4 percent decline in overall corn yield due to the crop possibly being planted 2 to 3 weeks later than normal. Weather will play a big part in this; how long the rainy season is, if harvest stays delayed and planting of the second crop.

Reports out of northern Brazil are showing very good yield results from early harvested soybeans, 10-15 percent above last year. Reports of over 70 bushels per acre yields have been circulating. Some analysts are now increasing their production forecasts as a result. Surveys are showing that crop estimates are increasing to 124 to 127 MMT range. The USDA’s estimate is at 123 MMT.

For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at asuntken@maxyieldcooperative.com. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.

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