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AgriVisor Morning MarketWatch

 
Tuesday, August 04, 2020
The rating of the US corn crop held steady from a week ago at 72% Good/Excellent which was not a surprise. Very little of the crop is poorly rated as well with just 7% in the Poor/Very Poor range. Soybean condition improved 1% on the week to stand at 73% G/E. As with corn just 6% of the crop is rated as Poor/Very Poor. Given current weather outlooks, these numbers are expected to change very little next week as well. Demand for new crop corn and soybeans has been incredible this year, but trade is not reacting as much as hoped. One reason for this is that China is the primary buyer, and in fact without their business, sales would be below average. There are also concerns that if trade relations continue to deteriorate between the US and China, we may see cancellations take place. There is also the fact that sales this large have already been estimated by the USDA. We will need to see the current demand rate continue for it to turn bullish for the market, and that is if crop estimates do not increase. It is possible we could see larger crop estimates in the next few supply and demand reports, which means we need to see demand rise as well to prevent ending stocks from building. New crop sales are also being countered by the cancellations we have seen to old crop sales on corn. While this tends to happen at the end of every marketing year, the verification of it is negative. 

Highlights
* Political uncertainty weighs on market
* Weather remains mostly favorable
* July 22nd wettest in past 125 years, 20th warmest
* Funds again buying soybeans, selling corn
* Flash sales continue; nothing from China however
* Weaker global currencies negate weak US dollar
* Export loadings unlikely to meet USDA estimates
* China rebounding from Covid faster than US
* Many Chinese factories back to pre-Covid output
* US energy demand remains depressed
 
Corn
* Corn rating unchanged at 72% Good/Excellent
* 39% of crop is in dough stage, 33% is average
* Brazil production to increase 8% this year
* China continues to auction reserves
* Harvest getting underway in Deep South
 
Soybeans
* Crop rated 73% G/E; +1% week ago
* 59% of crop has set pods, normal is 54% 
* Brazil production may increase 6%
* Record Chinese crush margins
* US biodiesel production rising
 
Wheat
* Funds nearly even on corn
* US sales 27 mbu ahead of last year
* Winter wheat 85% harvested
* Spring wheat 73% G/E
* Spring wheat 5% harvested, 10% is average
 
Livestock
* Cash cattle range from $95 to $102
* Cash trade volume remains low
* Weekly hog slaughter +200,000 year ago
* Wholesale beef continues to support futures
* Hog supply remains negative

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