E-Visor Reports: Market Watch

Monday, July 13, 2020
The majority of the numbers released in the July balance sheets came out as expected. One number that was lower than expected would be the new crop ending stocks on corn, which were 80 million bu under expectations. That said, corn ending stocks are still forecast to increase 400 mbu from old crop to new crop and remain ample. Soybean reserves are also expected to remain adequate at 425 mbu next year. This is nearly 200 mbu less than the old crop carryout though, which is helping to limit the bearish fallout from the large old crop ending stocks. One bright spot for both corn and soybeans was an increase to average cash values. The average cash corn value is now $3.35, and soybeans are at $8.50. This was a 15-cent increase on corn and a 30-cent bump for soybeans. Now that the monthly supply and demand report is out of the way, trade will once again focus the majority of its attention on two factors; weather and crop reports. Weather will be key as some forecast models expect heat to return to the Corn Belt this week and last through the end of the month. This will cover the majority of the pollination period on corn. The question is how much precipitation will be received with this heat to help alleviate its impact. We will also start to receive more yield estimates with this development. Surprisingly, some crop scouts have actually raised their yield projections on both corn and soybeans in recent weeks, even with adverse weather. These are being based on crop ratings which remain higher than usual despite less than favorable conditions. While crop ratings are not an accurate indicator of yield potential, they do signal how much stress has been applied to the crops. The next big USDA report will be the WASDE report in August which is a month away. 

* Lack of bullish news in WASDE report
* Weather forecasts turn benign
* Technical resistance limits advances
* Steady to lower ratings expected tonight
* Concerns build over rising Covid cases
* Outside markets again impact commodity investors
* China continues to rotate reserves
* China expected to slow meat imports
* China increases corn, soy import forecasts
* Forecasts increased La Nina odds

* Production at 15 bbu, -995 mbu from June
* 2019/20 carryout 2.5 bbu
* 2020/21 carryout 2.65 bbu
* 2020/21 world carryout 315 mmt
* Final yield higher than July in past 7 years

* Production up 10 mbu from June at 4.135 bbu
* 2019/20 carryout 620 mbu
* 2020/21 carryout 425 mbu
* 2020/21 world ending stocks 95.1 mmt
* Final yield above July in 5 of past 6 years

* All wheat production 1.824 bbu
* Production -54 mbu from June
* 2020/21 carryout 942 mbu
* 2020/21 world carryout 314.8 mmt
* Trade focused on global production reports

* 2020 beef production at 29.6 bil pounds
* 2020 pork production 28.5 bil pounds
* Beef production up 260 mil pounds
* Pork production up 770 mil pounds
* Over-production more of a concern than demand

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