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E-Visor Reports: Market Watch

 
Wednesday, December 16, 2020
When it comes to demand nearly all interest right now is on exports, but we have seen some sizable changes to domestic usage as well. The most talked about recently has been ethanol where usage is definitely a two-way street. Ethanol production demand on corn has been averaging 435 million bu for the past few months. While this is under the pace seen a year ago it is above the volume needed on a monthly basis to reach the yearly USDA estimate. So even with reduced usage from last year we could still achieve the yearly prediction. That said, ethanol manufacturing has been outpacing consumption for the past several weeks and stocks are now at a burdensome level. This could easily cause ethanol manufacturing to slow in the future and drop our demand. Feed demand remains high on corn though as poor pasture conditions have put animals into lots sooner than normal this year. It is possible these two could easily offset each other as the year progresses. On soybeans we are seeing record crush numbers to accompany the high exports. If rationing escalates this may be where the first reductions take place, especially if export buyers can source product from South America. 

Highlights
* Funds trimming long positions
* November NOPA crush a record at 181 mbu
* Soy meal exports a record 1.08 million pounds
* Starting to see heat build in Brazil
* US economy hopeful on Covid vaccine success
* Unemployment numbers remain a concern
* Total Brazil commodity production estimated at 266 mmt
* Year ago Brazil production was 257 mmt
* Trade looking forward to Jan WASDE  
* Attention also shifting to quarterly stocks

Corn
* All eyes on Chinese imports
* China showing more interest in alternative feed grains
* Brazil rains encourage Safrinha hopes
* US corn remains cheapest in global market
* Corn futures following other markets
 
Soybeans
* USDA predicts higher values on soy products
* Global stocks to use to tighten
* Buyers indicate immediate needs are covered
* SAM production larger on planting increase
* Chinese soy stocks are building
 
Wheat
* US exports a 5-year high
* Trade expecting global feeding to increase
* High plantings to off-set drought losses
* Ukraine sales at 70% of quota
* All eyes on Russian exports
 
Livestock
* Yearly beef exports total 779,000 million tons
* Seasonal weigh on cash markets
* Weekly slaughter under year ago
* China claims hog herd is at 90% of capacity
* Hog herd in China at full capacity by mid-2021

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