AgriVisor Morning MarketWatch

Friday, October 23, 2020
The variability we are seeing surrounding this marketing year are increasing. This has been a factor in the market all growing season, starting with last spring’s planting conditions. The most variability we are seeing this year is on yield, primarily on corn. Reports from the Western Corn Belt indicate corn yields are ranging from 40 to 50 bushels per acres below average to record high volumes. This appears to depend upon field conditions with corn on corn being the lowest yielding. A result of these yields and production totals is mixed movement. In areas where yields are the lowest, we are seeing the least corn movement, which is not surprising. In turn, this is also causing basis values to rise faster in those regions than the ones with better production numbers. Soybean production is more consistent across the Corn Belt, but movement has started to rapidly decline as harvest winds down and buyers are already pushing bids to entice sales. There is little doubt this is a factor that will continue all marketing year, especially until the South American crops become available and lessen our export demand. Commodities appear to be moving into a consolidative mode ahead of the weekend which is not surprising after the week we have had. 

* Chinese commodities hit record highs
* Brazil imports not expected to rise
* US dollar remains unstable
* Cold Storage report shows declines in stocks
* US gasoline demand -14% from last year
* US ethanol -16c/gal from Brazil
* US ethanol margins under pressure
* Covid impact on energy demand expected to last for years
* Black Sea rains not significant
* Country movement slowing

* Argentine crop -4.4 mmt this year
* Brazil 1st crop 44% seeded
* Ukraine harvest 40% complete; exports are limited
* Gulf basis weakens
* Interior basis firms
* Dry conditions in Brazil limit fungal disease
* US soy exports 3 weeks ahead of normal 
* Larger US production expected
* US harvest winding down
* Crush margins only firm in spot market
* US export +6% on the year
* Initial condition report next week
* Weekend freeze damage expected
* US plains remain dry
* Ukraine export values at 2 year high
* Weekly beef sales 13 wk high at 21,700 mt
* Pork sales at 26,800 mt
* Pork in cold storage at 466.5 million pounds
* Pork bellies at 24.8 million pounds
* Cold storage beef inventory at 462 mil pounds

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