E-Visor Reports: Market Watch

Wednesday, March 24, 2021
We are starting to see a slight shift in the attitude of the global market. For the past several months we have seen demand driving futures, mainly from China. China has been and still is the world’s leading commodity importer, but we are now getting indications this may be slowing. This change is coming from the resurgence of African Swine Fever in China and how the country’s hog herd is not rebuilding as quickly as expected. Some sources in China believe it will be at least two more years before the country rebounds from the outbreak. This is a vast difference from what we were initially told and casts a shadow of doubt over the country’s feed grain demand. It does, however, open the door for elevated pork imports to satisfy consumer demand. We may also see elevated beef imports given the price spread between hogs and cattle right now. The same time this shift in possible demand is taking place we are seeing larger crop estimates starting to come out of South America, mainly from Brazil. Not only have we seen more favorable weather conditions for Brazil’s crops but reports of more acreage being planted than initially thought. The combination of all of these factors could lead to elevated world production and stocks from current levels.  

* More countries enact Covid lockdowns 
* Most restrictions are in EU, but now in Brazil also
* US seeing elevated Covid cases
* world Covid cases up 8% 
* Sanctions placed on China due to human rights dispute  
* More concern on US inflation 
* Rains stabilize Argentine crops
* US river logistics improving 
* US drought reports shrinking 
* Most affected states less than 50% dry 

* ASF may cut Chinese demand 2 bbu
* Weather continues to favor early planting
* Chinese domestic values weaken
* China still leading buyer of US corn
* Large ethanol production expected this week
* No soybeans loaded to China in past week
* Soy oil continues to lead complex
* US old crop sales are slowing, still too high
* Canadian canola stocks -2.4 mmt from year ago
* US attache lowers Chinese import estimate 
* US wheat sales are slowing
* France wheat crop 87% G/E
* French wheat trading at $6.60
* Droughts improves in US wheat belt
* Reports of winterkill rise in Russia
* China lost a reported 9 million sows in Jan/Feb
* This will reduce China hog supply by 200 million
* China to increase imports to cover loss
* US slaughter numbers firming
* US cattle inventory largest in 15 years

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