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E-Visor Reports: Market Watch

 
Wednesday, December 02, 2020
Overnight trade was heavily pressured by wetter forecasts for South America and follow through selling after Monday’s key reversal. Trade continues to focus on US ending stocks estimates. At the present time the estimates are for carryout totals of 1.7 billion bu on corn and 190 million bu on soybeans. The most interest is on soybeans as ongoing demand will likely reduce this volume even more. There are forecasts that this number will eventually decline to just 100 million bu at the current rate of usage. There are several moving parts in this estimate though, and while exports remain high, there are indications that rationing has started. There is also domestic usage that will likely be adjusted to compensate for higher exports, even if they are realigned later in the marketing year. The same questions are rising in the corn balance sheets. Private analysts believe the US corn carryout could decline to 1.5 billion bu. While a reduction, this is not a level that would warrant price rationing. The lower corn ending stocks projection is also the result of elevated exports. Domestic corn usage is not as clear though and is less conducive to a carryout reduction. Feed demand on corn remains high, but we have seen reductions to other sources of demand, mainly ethanol. These differing opinions will likely cause an increase in interest on the December data. 

Highlights
* Wetter forecast for South America
* Buyers not surfacing on break
* Chinese demand may be satisfied for now
* Farmer optimism fades
* China economic indicators at 10 year high
* Early WASDE positioning taking place
* October soy crush estimated at 197 mbu
* Ukraine lowers grain production by 3 mmt
* US gasoline demand continues to decline 
* Stats Canada production update tomorrow

Corn
* Mixed estimates on Brazilian crop estimates
* Argentine crop has stabilized
* Export basis mostly steady
* China corn imports may reach 16 mmt
* China corn values starting to soften
 
Soybeans
* Chinese demand questioned
* Market waiting for confirmation of cancellations
* Small Canola crop supports soybeans
* Export basis steady
* Global production still record large
 
Wheat
* Argentine harvest getting underway
* Russia to increase exports
* Russia undercuts global market for sales
* Global production rising
* Initial Australian flush has passed 
 
Livestock
* Meat demand questioned
* Pork demand stronger than beef
* Cash trade remains thin
* US slaughter numbers remain high
* Slaughter margins up for 5th straight week

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