AgriVisor Morning MarketWatch

Friday, October 16, 2020
Once again trade is starting to try and predict Chinese commodity demand. China recently released its import projections for the 20920/21 marketing year with totals of 7 mmt on corn and 95.1 mmt on soybeans. These numbers are being heavily debated. On corn the question is coming from the fact China already has more purchases on the books than the projected total. Given this confusion, China is either going to import more than they are showing, or cancellations may take place. There is speculation that cancellations may be a possibility and that recent purchases have been made to satisfy the Phase 1 agreement. This is possible, but the fact China needs corn to satisfy elevated domestic usage makes it unlikely. China’s soybean import forecast is also being questioned as the total is 2 mmt less than this year’s imports. If china was in fact buying soybeans for reserves rather than immediate needs, the reduction is more believable. One worry on Chinese demand is why the US is not seeing any purchases beyond the current marketing year while Brazil is. It is reported that Brazil is making record soybean sales for its next crop with China the primary buyer. This gives the idea that the US is only going to be used to fill gaps in the Brazilian supply.

* Stimulus package remains doubtful
* Current proposed package benefits questionable
* US dollar volatility building
* Average interest on 30 year mortgage record low 3%
* Low energy demand pressured ethanol demand
* Ethanol production -3.5% from year ago
* Rain chances improve for Brazil
* France lowers all crop estimates
* Argentine tax adjustments not beneficial
* Buyers show up on breaks, both futures and cash

* China corn loss at 10% from weather
* China corn values record high
* US loadings +72% from year ago 
* Rains slowing Brazil planting
* Corn harvest gains momentum
* Brazil planting near 4%
* Average Brazil planting near 12% 
* US harvest in later stages
* US farm sales slowing 
* NOPA Sep crush lowest in past year
* Wheat inspections slowing
* Cumulative loadings still up 9% on the year
* 90% of US wheat area remains dry
* Farmers increase acres in hopes of rains
* US wheat condition remains high
* US not seeing surge in pork demand
* Germany supplying pork to other EU countries
* Huge range in cash sales
* Beef demand steady
* Economic concerns a limiting factor

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