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AgriVisor Morning MarketWatch

 
Tuesday, October 08, 2019
Futures continue to consolidate ahead of this coming Thursday’s WASDE report. For the most part, trade is expecting to see lower carryout numbers on corn and soybeans, both domestically and globally. Wheat reserves are forecast to be more in line with what was predicted in September. Trade is also focusing on trade talks between the US and China as tensions are growing between the two sides. It appears more barriers are being established as talks take place than being taken down. The most of these center on technology and financial investing but these have implications for the commodity market as well. There are also thoughts that the recent purchases of soybeans by China were merely a good faith gesture and could be canceled if talks break down. Trade is also monitoring US weather models that are now predicting blizzard conditions for parts of the Upper Plains later this week. Some locations of the Dakotas are forecast to receive upwards of 20 inches of snow with high winds. These is little doubt this will cause damage to standing crops. Volume is thinning in the markets ahead of the upcoming reports which is making for more volatile trade. 

Highlights
* Questionable results from trade meetings
* Tensions building between US and China
* Blizzard forecast for Upper Plains
* Biofuel package offers little support to renewable fuels
* Export loadings positive for soybeans and wheat
* Corn demand is well behind expectations
* Trade volume thinning ahead of WASDE 

Corn
* US corn 58% mature; normal is 85%
* US corn 15% harvested; 27% is average
* Demand is a major issue
* Basis firming on light movement
* Estimates indicate lower carryout

Soybeans
* Soybeans 14% harvested; average is 34%
* China does continue to buy soybeans
* Brazil 1st crop larger than thought
* Early US yields lower than hoped
* Canola yields on low side as well

Wheat
* Tight supply of high-quality wheat
* Russia pegs wheat crop 6 mmt higher than USDA
* Argentina/Australia remain dry
* Japan skips weekly import purchase
* Export inspections remain high

Livestock
* December hogs at low of the calendar year
* Cash cattle driving futures
* Funds now long cattle
* China has booked 427.2 million pounds of US pork
* Hogs down 5 straight sessions on low demand 
 

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