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E-Visor Reports: Market Watch

 
Thursday, May 21, 2020
When it gets down to it, today’s market continues to go back to supply and demand for overall price discovery. While in most years this is separated by each commodity, this year we have crop years giving us an even greater challenge on possible stocks. This is not just for the US, but for the global market. Old crop soybeans in the United Sates are forecast to end up at a large 580 million bu. New crop stocks in the US are expected to drop to just 405 million bu, and possibly lower. The global soybean supply is also forecast to shrink next year to 98 million metric tons, and that’s even with a record 131 million metric tons of soybeans projected for Brazilian production. This tighter stocks projection leaves little room for production loss on a global scale. Just the opposite is true on the grains right now. US ending stocks of corn and wheat are projected to be more than adequate this year, and for next year, the corn supply is expected to be at a 33-year high. From a global point of view, ending stocks are going to be even larger. Just a few months ago we were talking about the sharp drop in corn reserves over the past few years. Now, we are looking at corn stocks that are approaching burdensome at 340 million metric tons. Even if we see a slight increase in corn demand the world market is in no danger of depleting its reserves. The recent jump in corn production may also finally push production above demand, meaning the world supply will no longer be running at a deficit to demand. These scenarios are all using current data though, which will change several times. 

Highlights
* Farmer interest in movement remains minimal
* Argentine officials report stranded barges from low water
* China to auction 10,000 mt more pork
* US ethanol production up for 3rd straight week
* US ethanol stocks down 564,000 barrels last week
* Ethanol stocks now near last year
* US likely to extend travel restrictions
* River flooding likely in US
* Gasoline/ethanol spread at 11 cents
* Fresh news becomes sparse

Corn
* N/S Dakota have 4.5 million unplanted acres
* CIF basis continues to firm
* More losses expected to Brazilian Safrinha
* China shopping for more corn
* Ethanol production rebound

Soybeans
* Brazil loadings at record pace
* Funds more comfortable buying soybeans
* Soybeans now hitting resistance
* China books 2.2 mmt soybeans since February
* Chinese soybean values at 12 month high

Wheat
* Russian crop smaller than last year 
* Black Sea weather improves
* US wheat loadings 4% under estimates
* Spring wheat emergence very slow
* Rains a benefit for US crop

Livestock
* COF tomorrow afternoon  
* Placements could be down 25% from March 
* June hog/pig report to show contraction
* Pork cutouts see record decline
* No sales in FCE auction