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E-Visor Reports: Market Watch

 
Thursday, May 27, 2021
Old crop movement of farm stored corn and soybeans is being closely monitored. Now that planting is winding down across the United States we are at a stage of the year where elevated movement tends to take place. The better new crop production appears, the higher the movement of old crop inventory. How much selling we see over the next few weeks is being heavily debated, however. For one we had heavy country movement right at last fall’s harvest with many farmers across the US moving their entire crop by the middle of last winter. As a result country movement has been very sporadic since. We also had a large jump in sales following the May WASDE report as the break in futures caused “give up” liquidation of remaining farm stored bushels. This may leave very little farm stored inventory to move from now until harvest. Country movement will likely be even lower in regions that are experiencing crop stress which so far has been confined to the edges of the Corn Belt. Demand may also impact country movement as some interior processors claim they will take extended down-time if bushels become hard to source. While this is possible, today’s elevated processing margins on both corn and soybeans may limit this activity.  

Highlights
* China has massive to arrive on grains/oilseeds
* China summer needs mostly covered
* Transit issues remain in Argentina
* More planted acres in Brazil than thought
* US overvalued in global market
* Early harvest possible this year
* High initial crops ratings expected
* US ethanol stocks tightest since 2016
* Trade starting to look to June 30th reports
* Analysts question US yield estimates 

Corn
* Few buyers showing interest in US corn
* China comfortable with new crop coverage
* Trade questions Chinese production
* South African crop +7% this year
* Interior basis softens
 
Soybeans
* Argentine calendar year exports +62% last year
* Chinese crush margins negative
* Poor margins may slow deliveries
* Interior basis becomes mixed
* Soy meal values under pressure

Wheat
* Russia projects 80.7 mmt crop
* USDA puts Russian crop at 85 mmt
* Canada planting ahead of average
* US harvest ahead of normal
* Russia to implement new taxes in June
 
Livestock
* Cash cattle continue to firm 
* Cattle expected to soften post-Memorial Day
* Packers now focused on July 4th coverage
* Sellers surface on rallies
* Chinese hog herd is building  

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