AgriVisor Morning MarketWatch

Friday, July 23, 2021
Interior basis values in the United States are becoming more volatile. Country movement of farm stored inventory is lighter than expected ahead of the upcoming harvest. The June stocks data showed us that farm stored corn and soybeans is considerably less than a year ago and some producers feel they will be able to store the rest of their old crop bushels along with what they will harvest this year. Others want to see what happens with crop development over the next few weeks before marketing their remaining inventory. This has caused basis to strengthen across much of the Corn Belt, but more so in Eastern regions where basis is averaging 10-cents better than in the Western Corn Belt. Processor bids are starting to become more erratic though as processing margins are mixed. Crush margins on soybeans have started to improve which is causing soybean buyers to push for deliveries. Ethanol margins have declined in recent weeks though and are near breakeven in several areas. This is limiting how much interest we are seeing in pushing bids at ethanol plants. Yesterday’s session was heavily influenced by weather and today will likely be no different. The main question is how long the forecast heat will impact the US and if rains will accompany the elevated temperatures. 

* Field reports mixed on WCB crops
* Some corn termed “better than expected” 
* Brazil freeze was more of a factor for sugar
* Argentine export taxes forecast to rise
* Argentine soy sales 2 mmt under last year on tax threats
* More countries focus on food inflation
* US building permits drop to 8 month low
* Trade starting to look to August WASDE
* Trade expecting lower production figures
* August options expire today

* Export line up is low
* US corn mostly pollinated
* Ukraine corn cheapest in mkt
* Brazil may need more corn for ethanol
* China cancels old crop corn bookings 
* Loadings need to average 29 mbu/wk
* Seasonal indicate lower values
* China crush margins remain negative
* China focused on Brazil imports
* Soybean sales ahead of yearly estimated total

* Reports indicate low Kansas protein 
* Global wheat market rallies
* Buyers continue to pass on high values
* More countries limit exports
* Weekly sales starting to increase
* July COF estimated at 99% year ago
* June placements estimated at 96%, marketings 102% 
* Weekly meat sales increase
* China cancels US pork purchases
* Cold Storage inventories all under last year

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