AgriVisor Morning MarketWatch

Monday, July 06, 2020
Now that we are past the July 4th holiday, we will likely see a shift in market attitude. Corn is starting to pollinate in parts of the Corn Belt, which is when many agronomists claim final yield can be greatly affected. Parts of the US are expected to experience well above normal temperatures during this time frame, which is a concern, especially if temperatures do not recede at night to give the crop a chance to rest. There are also mixed precipitation chances for the Corn Belt, with some predictions for wet conditions and others believing they will remain dry. This uncertainty started to get more market attention last week and likely will again this week. The most interest will be on corn where funds continue to hold a record sized short position. We will also start to see positioning for this week’s WASDE report that will be released on Friday. This report will include the changes that were made in the June acreage and stocks report and likely give us several changes to balance sheets, both old and new crop. Again, the most interest may fall on corn where more analysts have started to back off on their yield estimates. The USDA is currently using a robust 178.5 bushel per acre yield in its balance sheets. This is 5.3 bpa above trend, which is what most believe is a more accurate yield. Given the current acreage estimate, this would decrease corn production by nearly 475 mbu. This would greatly impact the entire outlook of the supply and demand charts on corn, even if demand does get cut as some also believe will happen. No changes are being predicted for soybean yield at this time, as that crop is more influenced by weather in August than now. 

* Market uncovers buying interest
* Crop ratings expected to decline tonight
* Market focus now on weather, crops reports
* July WASDE report on Friday
* WASDE to include June 30th data
* Trade not as comfortable with commodity reserves
* Brazil export issues on the rise
* Corn/Soybeans approaching overbought
* Global food prices rising
* US unemployment falls to 11.1%
* Uncertain equity markets support commodities 

* China books corn for reserves
* Pollination starting in Corn Belt
* Reports of heavy rains causing washouts
* Concerns over quality of farm stored bushels
* Brazil to increase corn plantings

* US crush margin down to 66 cents
* Buyers more interested in new crop offers
* South America preparing for planting season
* Brazil farmers to increase plantings
* Argentine farmers to hold acres steady

* Lower winter crop rating expected
* Winter wheat already -14% from initial rating
* Global wheat production is variable
* Black Sea reports better crops
* Russian harvest getting underway

* Weekly beef sales at 12,326 metric tons
* Beef sales -50% from previous week
* Pork sales last week at 39,151 mt
* Pork sales at 9-week high, +67% from last year
* 55% of weekly sales to China

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