E-Visor Reports: Market Watch

Friday, February 12, 2021
We are now at a stage where more interest is starting to be placed on US weather outlooks. The most interest is on the drought that is impacting the US in both the Plains and the Midwest. The obvious concern is that unless precipitation is received soon these regions will experience drought all growing season. While this is possible, it is not necessarily true. In fact dry conditions to start the planting and growing season may be a benefit for production. A dry spring will allow early planting and prevent the loss of acreage that took place last year, especially in a year where every acre is needed. A dry spring may also allow some bushels to be harvested in the old crop months. This would help bridge the gap between crop years and prevent shortages in inventory. How soon the current drought breaks down, specifically in the Southern Plains, will hinge on how long the La Nina lasts. The sooner this dissolves the sooner the United States may see a return to more normal rainfall patterns. Trade may be more willing to add risk premium to futures this year though given the need for large crops. 

* Optimism grows on Covid vaccine benefits
* Corn/soybean price ratio narrows
* Brazil exports remain limited
* USDA underestimating US exports
* Global processing margins under pressure
* Wide range in SAM production estimates
* Farmer selling halts after market break
* Chinese Lunar New Year starts today
* Other countries will celebrate with China
* Markets closed next Monday for President’s Day  

* US sales at 87% of yearly estimates
* Chinese corn values soften
* Corn buyers report immediate needs covered
* Global corn production expected to rise
* Argentine corn 20c/bu under US
* Low pipeline inventory a concern
* Farmers have little old crop left to market
* US crush margins pressured
* Average US crush margin 73 cents/bu
* NOPA crush next Tuesday est 183 mbu
* Winterkill likely in US
* Russian tax changes being next week
* France predicts larger crop/exports
* Global wheat plantings rise 
* Wheat feeding to increase 
* Pork exports to China slow
* Monthly exports -32% from year ago
* Total pork exports +15% from year ago
* 26% of Us pork production is exported
* China turns to beef imports

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