E-Visor Reports: Market Watch

Friday, June 26, 2020
While much of the attention on corn production at the present time is on the United States, we continue to see interest on South America as well. The Brazilian firm Safras surprised trade last week by releasing a new crop corn production estimate for the country of 108.4 million metric tons. This is well above the 100-101 mmt being predicted for this year. Safras is using higher acreage in their estimates as planting conditions are more favorable in Brazil, as is the currency exchange rate that will generate high returns. The question is what this production, if accurate, will do to the global balance sheets. In the June WASDE report the USDA projected world corn ending stocks of 337.9 mmt for the 2020/21 marketing year. If Brazil’s crop is this large, it will obviously increase that number. This reverses a trend of decreasing world corn production and thoughts we may eventually get to a point where rationing might be needed. The other side of this equation is demand, which is being heavily disputed as well. The most doubt is on ethanol where the USDA is predicting a large rebound for the US. Not everyone is on board with this belief, and some analysts believe it will be no greater than this year. This is a difference of 300 million bu, and that is if we do not see any further declines to old crop production which are quite possible. Bottom line is that the global corn supply is growing, making any small decline to production easy to absorb. Until this changes we may not see funds cover their short positions which is needed to turn the market around. 

* Brazil guarantees Covid Free meat exports
* Other exporters hesitant to make such claims
* Chinese consumers show concern over imports
* Ukraine crops in better shape than year ago
* US ethanol stocks now lowest of calendar year
* US ethanol for export value -16.3% from year ago
* US/Brazil ethanol spread now 6c/gal
* Covid surge again impacting global economy
* Stats Canada acreage estimate next Monday
* Crop ratings expected to hold steady next Monday

* India lowers import tariff
* India trying to support poultry market
* Global corn crop estimates rising
* IGC raises global corn crop 3 mmt
* Steady ratings Monday night

* Argentina crushing more soybeans
* Global crush margins under pressure
* Trade not impressed by flash sales 
* New crop esports remain strong
* China taking half of new crop total bookings 

* Rains slow harvest
* Global wheat values under pressure
* High variability in Kansas crop
* Some elevators expect ½ normal receipts
* Yields range from 30 to 60 bpa

* Beef sales 24,373 mt last week
* Beef sales +21% last week, +61% last year
* Pork sales last week 24,000 mt
* Pork sales -19% last year
* US hog inventory +5% at 79.63 million

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