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E-Visor Reports: Market Watch

 
Tuesday, July 07, 2020
As expected, the condition of the US corn and soybean crops held mostly steady on the week. Both crops are now rated 71% Good/Excellent, which remain high ratings for this time of year. This could easily change in the near future though as weather is turning stressful across much of the Corn Belt. The greatest impact is temperatures which are well above normal in many regions. Along with this heat is limited precipitation. This will be more of a factor on corn as that crop is now beginning its pollination stage of development. Supply and demand is always an underlying factor in the market, just some years it has more of an impact than others. In years such as this, we are seeing changes to these two wash each other out as we move through the growing season. We have started to see private analysts walk back their corn yields in recent weeks from less than ideal weather in parts of the Corn Belt. Normally this would receive a larger reaction in the market, but the sheer size of the corn crop that is being forecasted this year is tempering the reaction. We are also seeing some of the same analysts who are lowering corn yields lower corn demand as well. The main uses being scaled back are ethanol and exports. In the June balance sheets the USDA projected increases in ethanol demand of 300 million bu and in exports of 375 mbu. We have not seen much for changes to soybean production this growing season, but same as in corn, we are starting to see more doubt over forecasted demand. For soybeans the doubt is on exports which are expected to increase 400 mbu from this year to next. 

Highlights
* China continues to rotate inventory
* IL River closures starting to take place
* 1/3 CFAP payments have been sent
* Rally has not hindered exports
* Heat to remain across US
* No change to biofuel blend rate
* US continues to see trade tensions with China
* Farmer selling remains high
* US processors starting to take downtime
* US food service industry sees reduced demand
* Russia increase grain export forecast

Corn
* US corn 71% Good/Excellent
* Corn is 10% silking, 16% is average
* Privates put corn yield at 174 bpa
* Pollination getting underway
* Old crop demand being questioned

Soybeans
* Crop is rated 71% G/E
* Pod setting at 2%, normal is 4%
* Chinese crush margin at 18-month low
* Privates put yield at 49 bpa
* Export values firming for July/August

Wheat
* Winter wheat 56% harvested, 55% is normal
* Spring wheat 70% G/E
* Spring wheat 63% headed, 68% is normal
* Most production concerns are on North Dakota 
* Winter crop in France smaller than thought

Livestock
* China suspends pork from 2 more Brazil packers
* China shows more concern over containing Covid
* US beef exports drop
* Cash cattle trade remains thin
* Slaughter numbers above year ago

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