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E-Visor Reports: Market Watch

 
Tuesday, October 15, 2019
Overnight trade is weaker as buyers have yet to surface. Growing pessimism on the US/China trade deal is weighing on the market, as is sparse fresh news. Trade was quiet yesterday with little fresh news being found to drive the market and this carried over into the night session. Much of what took place, and easily could again today, was consolidation follow the strong finish to the previous week. Trade is also still trying to determine what the real impact of negotiations between the US and China will mean for commodity demand. Traders are not as confident we will see an increase in Chinese demand as they previously were. The big hold up right now is China wants all tariffs removed before agreeing to any parts of the proposed deal. Weather will continue to be a factor in price discovery today as many regions of the Corn Belt are again harvesting crops. The delayed crop progress report will be released after the close tonight, but these numbers may not carry much weight given the advancement we are seeing take place. Even with this activity we are not hearing much on yields, other than many farmers are finding them to be “better than expected” in most areas. As always this is a debatable statement, as expectations are always suspect. Today’s data releases will include the weekly export inspections and NOPA crush report for September. 

Highlights
* Trade deal uncertainty
* Mid-East developments
* Frost for much of Corn Belt this week
* Wet weather next week
* Ethanol margins again positive
* Chinese soy demand down 7.9% from last year
* Interior basis values remain firm as harvest begins

Corn
* Taken on a follower role
* Lower demand negates production loss
* Ethanol demand may improve
* Yield reports “better than expected”
* Sales less than 1/3 of needs

Soybeans
* NOPA crush expected to be a record 162.2 mbu
* Brazil soy planting at 9.5%; average is 12%
* Global soy demand declining
* Chinese soy imports in Sep -13.5% from August
* Wetter forecast for Brazil

Wheat
* Acres abandoned in No Dakota
* China to cap govt purchases for storage
* Russia increases crop estimate
* Freeze loss possible in winter crop
* Buyers pass on US offers

Livestock
* Beef export demand questioned
* Chinese hog herd -41% in Sep from 2018
* Chinese sow herd -39% Sep to Sep
* Chinese Sep pork imports up 76% from Sep 2018
* Chinese beef imports up 50% from year ago