AgriVisor Morning MarketWatch

Friday, April 03, 2020
Trade has now fully digested the early week USDA data and is focusing on more traditional fundamentals. One factor that is quickly moving to the front of the market is what we will see in next week’s updated WASDE report. On the domestic side trade will see how the USDA incorporates the quarterly stocks data into balance sheets. At the same time, we have seen a considerable change in domestic demand since the March data was released that will have an impact on ending stocks. To see a sizable shift in balance sheets would not come as a surprise. The same is true on the global side. Several private firms have updated their production estimates on South America, and these could easily surface in next week’s report. A combination of adjustments would indicate a 6 to 8 million metric ton reduction to South American soybean production. While this seems like a stretch and is unlikely to happen all at once, it is possible. Major adjustments to crops may come after harvest, which will be in the next few weeks on Brazilian soybeans. Reductions to the corn crop are just as likely in South America but will likely come at a later date. Trade will also focus on demand, with an emphasis on China. Chinese soybean stocks have been greatly reduced in recent weeks and buying has followed. China has even lifted restrictions on Canadian canola to try and satisfy demand for protein feeds. Trade on a whole continues to be driven by the outside markets, and likely will be even if we do see friendly numbers in next week’s WASDE update. 

* 6.6 million US jobs lost last week
* Economists expect another 20 million jobs lost in next 2 wks
* OPEC might cut oil production; demand is more of an issue
* China to start buying crude for reserves
* Some analysts predict sub $10 crude
* Markets struggling between supply and demand
* Winter storm to hit Upper Plains
* US record ethanol supply likely to rise
* US rail traffic down 11.4% last week
* Argentine port traffic -20%
* Country lock-downs impacting exports/imports
* Brazilian Real -5% in last week 

* Gulf basis firming
* Ethanol demand continues to drop
* Exports remain high
* Domestic corn demand to slip 300 mbu
* Analysts believe US corn acres 2-3 million too high

* Gulf basis stronger
* Logistic issues hinder Brazil exports
* Chinese crush margins narrow
* US soy acres underestimated
* Argentine crop reductions 

* Wheat product demand is fading
* Paraguay crop a record
* Egypt cancels tender
* US rally hurt sales
* Buyers wash out of US bookings

* Low restaurant a concern
* Demand destruction a worry
* Swine flu cases rise in China
* Beef sales last week at 18,231 mt
* Pork sales at 38,152 mt; 49% was to China