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E-Visor Reports: Market Watch

 
Monday, June 15, 2020
Now that the June WASDE is well behind us, market attention will shift to the reports that will be released on the 30th; those being the quarterly stocks and revised planting estimates. Trade will immediately take the acreage numbers and affix the current WASDE yield estimates to revise production outlooks. These will likely surface later this week and until the reports are released. In all reality, we need to take the stocks data into account as they will have just as much of an impact on grain inventory on both old and new crop. Ahead of this trade will continue to monitor weather reports and their impact on crop ratings. Both corn and soybeans continue to hold higher than normal good to excellent ratings which are indicators of elevated yields. The fact that ratings are better than last year are also giving trade the indication of higher production figures. This is just part of the ending stocks equation though, as we have to continue to monitor demand. Many analysts have used the Phase 1 agreement usage numbers in their balance sheets, and these are becoming less likely to be achieved. We are also seeing other areas of demand be doubted, mainly ethanol production. While these numbers were all just updated, we will continue to see them evolve, especially as we start to near the end of the old crop marketing year. Of all of the fundamental factors to monitor right now, weather remains the primary one. Over the past several weeks we have seen favorable conditions develop across much of the US. As a result we continue to see limited risk premium in the futures market, which is also limiting price potential. 

Highlights
* Bio-fuel groups starting to choose political sides
* US oil rig count under 200; lowest since June 2009
* Covid-19 impacting US fruit/vegetable industry 
* Some farmers less optimistic on yields
* US economy strength being questioned
* Equity markets post significant losses
* Concerns build over Covid-19 resurgence
* GDP to decline 6.5% this year
* Crops ratings up 1-2% tonight
* Fresh news remains sparse
* Acreage reductions in July WASDE is expected

Corn
* Slow emergence being reported in fringe areas
* Replants noted in many areas
* Ethanol demand on corn at 3.8 bbu so far
* Focus now on July pollination 
* Rumors of Chinese interest

Soybeans
* Soymeal exports expected to decline
* Gulf basis starting to firm
* Argentine crop estimated at 50.7 mmt
* Palm oil strength supporting soybeans
* New crop seeing more export demand 

Wheat
* Australia raises crop estimate
* Australia crop now 26.7 mmt
* China showing interest in US spring wheat
* Dry weather slows Argentine planting
* US yields rising as harvest progresses

Livestock
* Push being made to ease processor regulations   
* Beef supply to grow into summer months
* China claims ASF vaccine shows promise
* Weekly pork loadings to China were 40% of total
* Chinese pork demand remains record sized

RISK DISCLAIMER: The risk of loss in trading commodity futures and options is substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. The information contained in this report is believed to be reliable but is not guaranteed to accuracy or completeness by  AgriVisor, LLC. This report is provided for informational purposes only and is not furnished for the purpose of, nor intended to be relied upon for specific trading in commodities herein named.  This is not independent research and is provided as a service.  As such, this is considered a solicitation.