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Agrivisor Morning MarketWatch

 
Wednesday, April 07, 2021
We are starting to see more estimates released for Friday’s updated WASDE numbers. It is no surprise that the most attention will be placed on the US soybean stocks to use. This is currently at a minimal 2.6% and not expected to increase much next year either. This depends heavily upon demand though, and if China takes the large volume of soybeans it currently has on the books. China has a known 370 million bu in US purchases and possibly twice as much given the volume that is in the unknown category. It is quite possible that at least a portion of these may be cancelled. At this time it would not take much of an increase and we would see a decline in market urgency to ration inventory. There is also going to be more attention on the global numbers as the world stocks to use is also the tightest in several years at 9.8%. Trade is less concerned with corn balance sheets, but there is a possibility of this changing in the future. Some usage forecasts indicate nearly 500 million bu more corn demand than the USDA is currently predicting. If accurate this would put corn in the same rationing scenario as soybeans are in. 

Highlights
* Market attention now on planting
* Weather mostly favorable for fieldwork
* Record equity market limits commodity investing
* China banks look to slow economic growth
* USDA underestimating domestic feed grain usage
* Global feed demand focused on alternative grains
* China now using rice for feeding
* Covid restrictions placed in some regions, lifted in others
* Higher weekly ethanol production expected
* Increased positioning for WASDE report on Friday  

Corn
* Export line up on feed grains thins
* Ukraine continues to sell to China
* Weaker Chinese values to limit expansion
* Interior basis values remain firm
* Reduction to Safrinha estimates
 
Soybeans
* Brazil harvest into later stages
* Brazil March exports a record
* Chinese crush margins turn negative
* Trade expecting larger new crop carryout
* US crush margins remain favorable 
 
Wheat
* US winter wheat condition to improve
* Ukraine wheat values pressured
* Russia export tax hike on June 2nd 
* Russia lowers export forecast
* Egypt reserves build, buying slows
 
Livestock
* Cash cattle asks up $2.00-$3.00
* Feedlots focused on tight supply
* Packer margins remain strong
* Consumer beef/pork demand remains high
* Restaurants re-stock as restrictions lift

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