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E-Visor Reports: Market Watch

 
Tuesday, July 14, 2020
Unsurprisingly, the conditions rating of the US corn and soybean crops decreased last week. This came on the heels of the heat that impacted much of the Corn Belt. The corn rating declined 2% to stand at 69% Good/Excellent and soybeans were down 3% to stand at 68% G/E. Even with these declines the crop ratings are still historically high. Given current weather conditions it would not be surprising to see these rating bounce back next week. It is believed that the majority of the US corn crop is now in the pollination stage and will be for the next week to ten days. The concern that we have with pollination is that heat can affect it, which is true. A lack of moisture can also be a factor in how well a crop pollinates. Field scouts are quick to point out how much subsoil moisture the US still has, and how this has alleviated crop stress from a lack of rainfall as pollination starts. Several locations of the Corn Belt have also received precipitation in the past few days to further reduce crop stress. This is why we are seeing crop ratings hold mostly steady even with the extreme heat that has been seen in many regions. This is also where the talk of improved genetics on today’s crops, especially corn, start to increase. While many analysts do believe the US corn yield will be lower than what is currently predicted, they are also hesitant to make significant reductions to production until losses become better known. This is not uncommon as trade has been hesitant to add a significant amount of risk premium for the past several years. 

Highlights
* Crop rating still high
* Phase 2 trade deal unlikely
* Trade tensions between US and China growing
* Demand worries negating lower production ideas
* Larger SAM crops weigh on US outlook
* Domestic demand shows signs of decreasing
* July may go down as one of hottest on record
* Trade disappointed with lack of flash sales
* China remains top destination for US exports
* Weather conditions more favorable for crop development

Corn
* Corn 69% G/E; -2% last week
* Corn 3% in dough stage
* Final corn yield above July estimate in recent years
* Argentine harvest 30% complete, ave yield is 133.8 bpa
* Analysts raise Brazil’s 3rd crop estimate

Soybeans
* Crop is 68% G/E, -3% last week
* 11% has set pods, 10% is average
* Traders focused on August weather
* Final yield averaging 3 bpa above July est
* China buying Argentine soy for August

Wheat
* Winter wheat harvest at 68%, normal is 66%
* Spring wheat rated 68% G/E
* Spring wheat 80% headed, normal is 85%
* Kansas crop showing more frost damage
* Yields average 44 bpa in Kansas

Livestock
* Export demand stalls on US beef
* Yearly beef exports at 397,000 mt; even to last year
* Yearly pork exports at 1 mmt
* China takes 41% of US pork, last year was 23%
* Consumer demand remains worrisome

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.