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As thoughts of an expanding trucker strike in Brazil have faded, so has the willingness of traders to buy or hold existing longs and prices did an about face yesterday. Grain markets surrendered Friday’s gains and over in beans, a large portion of last Thursdays strength as well. You certainly cannot fault the market for trying to build in a little risk premium due to the trucker strike but as with any situation like this, the effects tend to be short-term. For those who trade this kind of news it is basically live by the sword, die by the sword. We do need to keep in perspective that there has really been nothing resolved in Brazil and there will be potential for spikes ahead but seeing this was not a well organized or financed movement, the impact would likely be temporary.
As we see bean inspections fade, corn continues to pick up a little volume and last week we posted the largest loadings for the marketing year at 50.4 million bushels. This was 41% higher than the previous week and nearly double the 10-week average and brings inspections to date up to 731.66 million bushels. If I am not mistaken, this is also the first time we have posted a weekly figure above the average needed to reach the target, which now stands at 39.2 million per week. Conversely bean inspections were down 34% from the previous week and 59% from the 10-week average coming in at 23.3 million bushels. This is a pattern we should see continue right into the summer months and at the pace we have been dropping we could be below the pace needed to reach the USDA targets within a couple weeks. This currently stands at 9.6 million bushels. Note that 68% of the beans loaded, or 15.8 million bushels were headed for China. The next two countries combined took 4.2 million. Wheat inspections most certainly did not excite anyone either at 16.5 million. This number was down 14% from the previous week but still 36% above the 10-week average. To reach the targeted 900 million bushels we need to push the average for the next 13-weeks up to 21.3 million. That is looking quite questionable and this after the USDA already trimmed the forecast.
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