Competition from South America and Ukraine continue to keep U.S. exports debatable. As I mentioned the past couple of weeks, Ukraine is amid harvesting record yields.
At the same time, we have significantly increased production estimates for South American production in 2019. Last year Argentina produced 32 MMTs, this year they are forecast to producer 41 MMTs. Last year Brazil produced 82 MMTs, this year they are forecast to produce 94.5 MMTs.
There's also talk that with Brazil's early start to planting and cooperative weather we could see a sizable jump in second-crop corn acres. It's still early, so that's a difficult argument to make, but it's certainly a bearish card that has been added to the deck.
Bottom-line, all this talk of potential increasing global production from our competitors is allowing the bears to question or trim a bit of anticipated U.S. export demand. Bulls are hoping the strong delays in the U.S. harvest and late complications with weather will force the USDA to further trim their yield and production forecast, ultimately tightening the U.S. balance sheet, and helping to keep prices supported.
As a producer, I've been seeing some improvements in "basis" that I believe are worth taking advantage.
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