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E-Visor Reports: Market Watch

 
Thursday, July 09, 2020
Much of today’s session will be spent getting final positions in place ahead of tomorrow’s monthly WASDE report. Estimates on what we will see for numbers are all over the board as the USDA will incorporate the quarterly stocks and acreage data into balance sheets. It would also not come as a surprise to see yields adjusted in the July report following recent weather conditions across the Corn Belt. Crop ratings have remained relatively steady since the last release of data which may prevent any alteration to the current crop estimates. This is especially on soybeans which are more affected by August weather than current conditions. The most interest in tomorrow’s balance sheets will likely fall on corn figures, primarily new crop ending stocks. The 5-million-acre reduction to corn plantings is expected to reduce the available corn supply by nearly 1 billion bu this year. While this is possible, it is not necessarily a given. The increase in corn stocks from expectations and recent sluggish demand may negate a large portion of the acreage reduction. The current ending stocks estimate on corn is 3.32 billion bu on corn and trade is split in what could happen to this. While some believe it will decrease to around 2 bbu, others claim it will hold close to 3 bbu due to current stocks and demand. The sleeper numbers in tomorrow’s report for corn may be feed and ethanol. Trade is also looking at soybean reserves and feels we will see much fewer changes to production, but we may see elevated demand from the recent crush pace. Very few changes are predicted for wheat. Once this data is released expect trade to quickly turn its attention back to weather as pollination is starting to take place on corn. 

Highlights
* Covid impact on grain demand a concern
* China booking SAM soybeans for August
* US economy stalls
* US unemployment expected to remain high
* Ethanol production up for 10 straight weeks
* Ethanol stocks up 456,000 barrels last week
* First ethanol stocks increase in 11 weeks
* Record daily Covid cases continues
* Crop stress to continue next week
* EIA predicts higher crude oil demand
* July WASDE report tomorrow at 11:00 AM CST

Corn
* China to increase corn imports 
* Elevated overnight low temps a concern
* Analysts hesitant to alter yield estimates
* Reductions continue to Safrinha crop
* Brazil exports on the rise

Soybeans
* Attaché sees elevated Chinese imports
* China soy imports still under USDA
* Canadian canola crop in good shape
* Chinese crop estimated at 18 mmt, USDA using 17.5 mmt
* Brazil soy supply underestimated?

Wheat
* French crop -21% last year
* Ukraine wheat crop -8%
* Egypt buys 230,000 mt Russian wheat
* Russian crop larger than thought 
* No limits to Russian exports

Livestock
* “New” Chinese hog flu not easily transmitted
* Yearly beef export -5.8%
* Pork exports nearly equal to last year
* China to auction 20,000 mt pork tomorrow
* Cash cattle drop under futures

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.