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E-Visor Reports: Market Watch

 
Wednesday, June 17, 2020
Trade is starting to become more sensitive to weather outlooks now that we are in the growing season. Dry conditions are welcomed during planting, but once the crops are seeded, a lack of rainfall will receive attention, even if just temporary. Before long we will be entering our next critical weather stages in the commodity market. For corn this will be the pollination stage which starts at the end of June and lingers through mid-July. Any excessive heat during this period tends to gain market attention, and to see buying at the same time is not surprising. That said, if we have rain events during this period it can temper any reaction to heat. We are also going into the pollination time frame with an adequate supply of soil moisture. While this will not be much of a factor for pollination itself, we tend to see corn plants use more water once pollination is complete. Having a full supply of sub soil moisture can ease any rainfall deficiency. The next stage of weather-related risk on soybeans will be the pod setting window, but this is not until later in July and into August. As we see interest shift more towards weather during this period, current forecasts indicate we could see heat build across the Corn Belt over the next several weeks. The decline in the corn condition last week now has trade thinking the crop may not be as great as earlier reported, and we are seeing less comfort with a record short position for this time of the year. Current crop ratings are higher than average and some of the best in recent years though, which will allow for some decline and still be highly rated. What may gain more market attention is if enough stress would build to see the poor/very poor rating increase. 

Highlights
* US forecasts turn dry
* Driest conditions in US Plains
* US/China to meet in Hawaii today
* Country basis starting to firm
* Export basis also showing strength
* Additional US stimulus package rumored
* Economists predict recovery will be slower than thought
* China delays release of economic data
* Russia will not limit grain exports
* Crude recovery supports corn

Corn
* Global corn supply is adequate
* Analysts predict smaller crop
* Japan is leading buyer of US corn
* Dec futures seasonally the lowest since 2006
* Small addition of risk premium seen 

Soybeans
* China showing more interest in fall offers
* Brazil dominates spot trade
* Privates predict larger plantings
* Loadings -45% from year ago
* US crush values lowest since Dec 2016

Wheat
* Spring wheat ratings highest in 30 years
* Low winter wheat protein level a concern
* Winter wheat yields remain high
* Ukraine wheat up $7/mt in June
* New crop demand remains slow

Livestock
* Brazil court forces JBS to close plants   
* US hog slaughter weight +9 pounds/head
* Covid resurgence may slow meat demand
* Countries see movement restrictions
* Cash trade remains untested

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.