AgriVisor Morning MarketWatch

Friday, February 14, 2020
Futures have tried to carve out a bottom this week but have failed to generate much in the way of buying interest. At the same time, we have not seen heavy selling pressure which has been beneficial. The most interest for the week was the WASDE report but this is now behind us and trade is focusing on next week’s Ag Outlook Forum data that will be released on Thursday and Friday. While we have seen several private analysts release estimates on this coming year’s acres this will be the initial look at what the USDA is thinking for this year and well beyond. This will also give us a clearer idea of projected demand which is just as important to balance sheets. Trade will also continue to monitor the spread of the Coronavirus and its potential impact on commodity demand. China claims they will adhere to the Phase 1 agreement, but this seems somewhat doubtful. China will definitely need commodity imports but when and what type remain questionable. We are hoping we may get the answers to these questions sooner than later as the Phase 1 agreement goes into full effect this weekend. To see China in and buy a huge volume of commodities right away is highly unlikely though. This is especially the case on soybeans where Brazil is offering product at a sizable discount to the US. This shift in demand was verified by last week’s export sales where China was only listed as the destination for one cargo. China can easily show up later in the year and still satisfy the terms of the Phase 1 agreement. We may see elevated trader positioning in today’s session as the markets will be closed Monday for the President’s Day Holiday. Trade will resume on Monday night for the grains and soybeans and Tuesday morning for the livestock. 

* Coronavirus worse than thought
* Testing revisions show more cases
* Virus will likely slow Chinses demand
* Phase 1 goes into effect 
* US/China continue with tariffs until Phase 2
* Dollar strength slows commodity investing
* OPEC predicts drop in global oil demand
* Ag Outlook Forum next week
* Larger Argentine production estimates
* Markets closed next Monday due to President’s Day

* US ethanol reserves near record high
* Weekly export sales remain high
* Brazil production questioned
* US corn undervalued
* North Dakota corn holding steady

* Brazil harvest 16% complete
* Sales slow, still above weekly needed average
* US sales to China hit 10-month low
* Brazil selling picks up
* Gulf basis firmer for spring months

* Weekly sales remain high at 23.6 mbu
* Texas crop rating declines
* Russian crop weighs on market
* Yearly wheat demand is up 14%
* Buyers sourcing needs from Canada

* Midwest weather slows movement
* Weekly cattle slaughter +13,000 from year ago 
* Hog slaughter up 125,000 from last year
* Beef exports -6.6% last week
* Pork exports decline 3% last week