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E-Visor Reports: Market Watch

 
Tuesday, December 22, 2020
Soybean futures set new contract highs yesterday as fresh buying interest surfaced. This was mostly from the Argentine labor issues and Russian export taxes, both of which could elevate demand for US soybeans at a stage where extra demand is not needed. In fact, the United States needs to see less soybean demand right now, not more. Sales of corn, soybeans, and wheat all remain above last year, especially on soybeans. We have started to see some buyers back away from US offers though as they know the South American crop will be available in the next few weeks. Even if the Brazilian soybean crop is slightly smaller than initially thought it will not deter exports, especially to start as several buyers are counting on these soybeans. The main one is China who has several purchases of Brazilian soybeans lined up. If the United states is going to see heavier cancellations to existing bookings take place, this is when they may happen. While soybean demand may slow in the upcoming weeks, we may finally see export loadings on corn increase. Corn loadings have trailed the volume needed to reach yearly expectations all marketing year, and while there is time for them to improve, the longer it takes the more trade becomes nervous that demand is over-estimated. If soybean loadings slow it will allow for corn loadings to increase as more port space will be available. 

Highlights
* Stimulus package passes congress
* US dollar starting to firm, still multi-year low
* Buyers lining up for Brazilian land purchases
* US not seeing flash sales
* Open Interest rising in appreciating market
* Biotech companies see increase in Chinese interest
* “New” Covid strain causing worries
* No sign of weakening La Nina
* Equity markets becoming choppy
* Funds reduce corn position, add to soybeans

Corn
* Exports likely to increase 200 mbu from estimates
* So America production may be overestimated by 10 mmt
* Ethanol demand continues to decline
* Argentine corn is pollinating
* China to increase Brazil imports
 
Soybeans
* Russia to tax exports through June
* Canola values at 7 year high
* Backlog builds at Argentine ports
* Need for oilseed rationing builds
* Chinese soy values dropping
 
Wheat
* US drought remains a concern
* Global supply over-shadows losses
* EU soft wheat production +9%
* So Africa crop +40% this year
* So Africa to see much lower imports
 
Livestock
* Cash trade non-existent
* Wholesale values under pressure
* Pork cut outs move higher
* Restaurant demand continues to fall
* Slaughter numbers are slowing

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