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E-Visor Reports: Market Watch

 
Friday, July 09, 2021
While the majority of the attention in next Monday’s balance sheets will fall on the domestic numbers, the global balance sheets will be just as important. In fact, even if the domestic numbers are steady, we could see the global figures drive the market in a bigger way. The most attention is falling on the Brazilian corn crop. The size of the Brazilian corn crop has steadily eroded for several months and is unlikely to stabilize now. Many analysts have the Brazilian corn crop at 95 million metric tons, well below the initial estimates. The recent freeze in Brazil is thought to have reduced the crop even more, with some analysts now claiming it will be no greater than 90 million metric tons. A few outliers claim the crop will be much smaller, possibly no larger than 85 million metric tons. At the same time we have had increase to both the Chinese and Ukraine crop estimates and these numbers may simply offset each other. Trade has looked past the current crop year and focused on the next one, where a considerable rebound is forecast for world production, and this may also temper any reduction to a smaller Brazilian corn crop. Less concern is being shown on the world soybean and wheat crops as losses in those are not being reported. 

Highlights
* Importers balking at high values
* Over half of Montana is in a drought
* EU biofuel imports to decline 25% this year
* Freeze damage in Brazil not fully accounted for
* Covid worries pressure all markets 
* Global food values -2.5% in June
* Food values still +34% from year ago
* July options expire next Wednesday
* July WASDE next Monday
* Weather may negate WASDE data 

Corn
* Brazil corn rallies after freeze
* Brazil corn still cheaper than US
* Analysts put US crop at 14.8 bbu
* Russian Ag Minister predicts lower exports
* Rating improvement expected next Monday 
 
Soybeans
* Analysts see lower US production
* China puts new crop imports at 102 mmt
* Old crop ending stocks may increase next Monday
* Elevated double cropping in ECB
* Record 21/22 Brazil production expected

Wheat
* New crop yields in Russia a record
* Lower Russian taxes attract buyers
* Spring wheat yields est 40-60% under trend
* More abandonments expected
* Canadian wheat as poor as US crop
 
Livestock
* Cash cattle mostly untested
* Boxed beef is mixed
* High-grade cattle hard to find  
* Choice grade cattle -2.6% from year ago
* China backing off on pork imports

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