E-Visor Reports: Market Watch

Tuesday, March 24, 2020
The greatest benefit for the commodity market right now is global logistics. This is especially the case for wheat, as many European countries have shut down borders to prevent the spread of Coronavirus. This is especially the case with France who is a leading supplier of wheat to the global market. With France exports removed, it greatly favors the US as a wheat source. We are also seeing logistic issues from South America as Argentina is halting exports from some of its main ports. This is a great benefit for US exports of soybeans and meal. Further benefit is coming from the export issues in Brazil, as the country remains focused on soybean loadings and not meal. Ongoing harvest delays and the supply disruption this is causing in Northern Brazil is also an issue for the world market, mainly China. China’s soybean appetite is starting to increase at the same time these disruptions are beginning which is stressing global supply lines even more. Aside from the movement of global commodities, production numbers are also a factor in price discovery. We have started to see reduction to global production figures, mainly from adverse weather in South America. Given recent crop estimates for Brazil and Argentina, it is not out of the question global soybean production could shrink 8 million metric tons from current estimates. It goes without saying this would have a sizable impact on global balance sheets. We are also starting to see doubt over global corn production estimates, and the likelihood for that crop to be reduced as well. While none of the reductions being forecasted would push the world into a rationing situation, the shift in the market from a growing supply to a shrinking one is worth noting. 

* Stimulus packages again fails to pass
* 2020 Summer Olympics to be delayed
* Additional US travel restrictions issued
* Global logistics favor US exports
* Stressful weather continues in SAM
* Widespread rains for US Corn Belt
* Russia suspends cereal exports for 10 days
* World food inflation expected
* Stats Canada Acreage report April 4th
* One week from USDA acreage/stocks data

* Argentine export forecast unchanged at 33.5 mmt
* US export loadings need to increase
* Russian grain supply -4.35 mmt from year ago
* Economics do not favor US corn production
* Future feed demand questioned

* Canada expects larger canola crop
* Brazil harvest 66% complete
* Soybeans rally in China
* Soybean shortage in China halts crushing
* Argentina claims exports will continue 

* Canada raises crop estimate
* French wheat 63% G/E
* Australia to make up for Europe losses
* Global logistic issues
* EU soft wheat yields -2.1%

* Tyson to add incentive for cattle supplies
* Tyson to pay $5.00/cwt live cattle, $7.99 on dressed
* US beef in cold storage 491 mil pounds; 477 mil in 2019
* US pork in storage 661.6 mil pounds; 615.6 mil in 2019
* Pork bellies in storage 74.4 mil pounds; 53.77 mil in 2019