E-Visor Reports: Market Watch

Thursday, June 24, 2021
We are starting to see a difference in opinion on current market structure. While there are regions of the world that are suffering from tight commodity inventories, global stocks remain adequate. One that is receiving the most attention is the soybean situation in the United States. The stocks to use on soybeans at the end of this marketing year is predicted at 3% and this only increases to 3.5% next year. These are both at levels that need rationing. Tight soybean inventory is only taking place in the United States however, as global stocks are forecast to increase year to year. Inventories of corn and wheat are also expected to tighten this year but remain adequate. This difference in domestic versus global stocks is pushing buyers away from the US. Another factor that is impacting global trade is transportation costs. Freights rates have started to increase with higher energy product costs and buyers are starting to take this into account when covering needs. As a result some buyers are willing to pay more for coverage if it is offset with lower shipping costs. For today’s session all attention will again fall on weather and the rains that are being received in the dry portions of the Corn Belt.  

* US gasoline consumption +10% from year ago
* Most interest in market on next week’s reports
* FND on July contracts is also next Wednesday
* Next Wednesday also brings month/quarter end
* Low waters still a logistic issue in SAM
* Parts of Brazil fully depleted of soil moisture
* Global trade drives ocean freight higher
* Global consumer costs a concern
* Weather focus on corn pollination stage
* July options expire tomorrow 

* Argentine corn $5-$10/mt under US
* Argentine farmer sales ahead of last year
* Corn harvest in Argentina remains slow
* Concerns over Chinese cancellations
* Corn for ethanol likely underestimated
* Crop rating lowest since 2008
* Below trend yield possible
* New crop balance sheets to remain tight
* China buying mostly SAM soybeans
* Argentine crush at 75% of capacity

* Spring wheat losses in PNW build
* Dakota’s wheat crop very poor
* Ratings indicate below trend yields
* US wheat quality better than thought
* Russian wheat lower in protein
* Quarterly hog/pig inventory today
* June 1st inventory est -2.3% from last year 
* Argentine to limit beef exports
* Boxed beef continues to decline
* Seasonal highs in beef likely made

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