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AgriVisor Morning MarketWatch

 
Friday, May 07, 2021
We are now seeing more positioning in the market ahead of next week’s long-awaited May WASDE report. This is one of the most anticipated of the marketing year as it contains the first official look at new crop balance sheets. There have been several estimates on new crop balance sheets already released, and most indicate the current tight stocks we have will continue into next year as well, especially on soybeans. Given current new crop acreage estimates, old crop carryout, and projected demand, it is hard to come up with a scenario that would warrant any build in soybean reserves. In fact, most models indicate a negative soybean carryout unless we ration more demand than we already have. This is mostly on exports, but we may need to trim some domestic usage as well. We are also seeing projections on new crop corn and these are not quite as concerning but do need to be closely monitored. Current balance sheet estimates indicate new crop corn ending stocks will remain tight, but not to a point where rationing will be needed. These outlooks depend heavily upon South American production though, especially on corn. If the Brazilian Safrinha crop is as small as some predict it could drive demand for US corn up and cut ending stocks to a worrisome level.  

Highlights
* Price rationing needs to continue
* Buyers surface on any break
* Some reports of replants due to excessive rain 
* Widespread rains forecast for Midwest
* Farm sales shift to new crop
* Developing crops need heat
* Cold slowing development, not hurting yield yet
* Brazil drought worst in 5 years
* Inflation more of a market concern
* Consumer spending is not slowing

Corn
* Hight prices slow export sales
* Conditions remain stressful for Safrinha 
* SAM values start to stabilize
* Farmers selling new crop bushels
* Planting near 75% next Monday
 
Soybeans
* China imports record 12.6 mmt Brazil soy in April
* Higher US yearly exports expected
* Record crush continues
* Market putting more interest in corn balance sheets
* Brazil May exports expected to slow 
 
Wheat
* Canada buying US wheat 
* Canada running low on some feed grains
* Australian crop to decline 6 mmt, still large
* Argentine crop record tying 19 mmt
* Ukraine crop a record 28.6 mmt 
 
Livestock
* Weekly beef exports -28% at 16,900 mt
* Weekly pork sales +36% at 48,200 mt
* Thin cash cattle trade this week
* Boxed beef remains strong
* High feed costs affecting global production

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