E-Visor Reports: Market Watch

Tuesday, June 23, 2020
Trade received mixed news overnight when it was initially announced the US/Chinese trade deal was not working, but was later clarified to state the Phase 1 agreement is still in place. This created confusion that weighed on overnight trade. There is little doubt we will hear more about this development today. The condition of the US corn crop rebounded 1 point last week to come in at 71% Good/Excellent. The crop is maturing at a normal rate with 2% in the silk stage. Soybean planting is in the final stages at 96% complete. The crop is now blooming on 5% which is in line with the normal pace. The crop decreased 2% from its Good to Excellent category, and now stands at 70% G/E. The winter wheat harvest is gaining momentum with a 29% completion rate, just ahead of average. The spring crop rating remains high at 75% G/E. These numbers were all pretty much as expected by trade. While much of the interest in the market right now is on production, demand is still a factor, and has prevented futures from rallying as much as hoped. This is especially the case on corn where demand is not up to expectations, mainly ethanol. Even with the recent reduction to projected ethanol demand usage has trailed the needed usage amount by 10 million bu per week. If this trend continues for the remainder of the marketing year it would add roughly 100 million bu of corn to ending stocks. Wheat demand is also being questioned as global production is on the rise meaning more competition for US sales. Quality may also become a factor on wheat demand as the US is seeing low protein content in the newly harvested wither wheat crop. 

* US/Chinese trade deal uncertainty
* Record new cases of Covid being reported
* US diesel supply down for 1st time in 11 weeks 
* USMCA to take effect July 1st
* US trade talks with EU limited
* Argentine Peso at record lows vs US Dollar
* Brazilian Real again declining in value
* Poor pasture leads to higher cattle placements
* Frost damage showing up in US wheat
* Positioning rises for June 30th reports

* US corn 2% silking, equal to average
* US corn 72% G/E, +1%
* Safras raises Brazil corn estimate to 108 mmt
* New crop corn sales at 140 mbu
* New crop corn sales +14% from year ago

* Soybeans 70% G/E, -2% on the week
* Soybeans 5% blooming, equal to average
* New crop export sales at 203.4 mbu
* New crop sales up 77% from last year
* China accounts for 55% of US soybean sales

* Winter wheat 96% headed
* Winter wheat 29% harvested
* Spring wheat 75% G/E
* Global wheat trade under US values
* Russian officials predict smaller crop than USDA

* 415.2 mil pounds beef in cold storage
* Year ago beef storage was 405.1 million pounds
* Pork in cold storage at 467 million pounds
* 2019 pork in cold storage was 629 mil pounds
* 59.18 mil pounds pork bellies in storage, 64.12 last year

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