AgriVisor Morning MarketWatch

Wednesday, September 23, 2020
Our rally on corn, soybeans, and wheat are starting to show signs of stalling as new buying is not quick to develop. The longer it does take this to happen, the greater our chance of seeing profit taking and a market reversal. Now that harvest is getting underway in the US, we are seeing more interest on yields. It is not surprising to see yields that are all over the place given the high variability we have seen to growing conditions this year. Places with favorable conditions all growing season are obviously seeing the best yields. One thing that is being noted is corn on corn acres showing lower yields. We need to remember that harvest is just getting underway and these reports will change significantly. Another factor with this year’s crops that is already getting attention is crop quality, mainly on corn. While early, test weight is already becoming a topic of discussion. Reports are increasing that while better than a year ago, corn test weight is again on the light side. This is especially the case in areas where precipitation was limited during the growing season. Same as with yields there is plenty of time for this to improve as harvest progresses and it likely will. Until it does however, we will see analysts start to show more doubt over projected production. The greatest concern with this is what it may mean for demand as some terminals in the US are still holding low-quality inventory from last year. 

* Market activity becoming more technical than fundamental
* We are one week from Sep stocks report
* Plans for oil industry subsidy are tabled
* Rains move through South America, more needed
* Interior basis volatility is building
* Ethanol slow-down causes CO2 shortage
* State of US economy remains uncertain
* Covid causing more closures globally
* Economists still project economy will improve
* Near perfect weather for US harvest activity

* Brazil corn prices attract buyers
* Average cash corn bids at 6 month high
* Corn/soy ratio favors soybean production
* Farmers selling picks up
* New crop corn sales remain record sized
* Soybean supply in Brazil questioned
* US soybean sales 56% of projected total
* China purchases may to 100 mmt
* Purchases totaled 96 mmt last year
* Brazil planting slows ahead of rains
* Yearly sales +6.8% year ago
* 12% of Argentine wheat crop in drought
* Argentine farmers may abandon wheat in worst cases
* US winter wheat acres +2-3% this year
* Australian crop twice last year’s size
* August beef in cold storage at 460.2 million pounds
* Pork in cold storage at 467.68 million pounds
* Pork belly supply at 30.53 million pounds
* Chinese pork supply down to 2 or 3 months
* More ASF found in Germany

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