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AgriVisor Morning MarketWatch

 
Wednesday, November 11, 2020
There is little doubt we will continue to see a reaction to yesterday’s WASDE report in today’s session. The most interest is on domestic ending stocks which dropped to minimal levels, especially on soybeans. This gave the market a bullish reaction yesterday and that momentum is expected to carry over into today’s trade as well. Now that the monthly balance sheets data has been released, trade will again focus its attention on South American weather and production and what to expect for next year’s acreage in the US. When it comes to South America, all interest is on the dry conditions in Southern Brazil and Argentina. There is little doubt this will reduce the output from that region even if rains do develop. Trade is also more closely monitoring Chinese demand. Now that it appears Joe Biden will become the next president of the United States there are thoughts China will want to renegotiate its trade deal with the United States. This is a topic that is not limited to China, as several countries are wondering if trade relations will be changed with a new administration after the first of the year. While not a given, it would not be surprising to see buyers only secure immediate needs until that time when policies will be better known. 

Highlights
* Stocks to use now 4.2% on soybeans, 11.5% on corn
* Average cash price projection $4.00 corn, $10.40 soybeans
* Futures will start to ration soybean supply
* Buyers may re-sell soybeans if economical
* Brazil soy planting now ahead of normal
* US farmer 50% sold on corn
* Soybeans 75% sold
* Interior basis becomes volatile
* Ethanol demand has stabilized

Corn
* US corn yield at 175.8 bpa, crop at 14.5 bbu
* US corn crop 3rd largest in history
* US ending stocks at 1.7 bbu
* 20/21 world ending stocks 291.4 mmt
* US exports a record 2.65 bbu
 
Soybeans
* US yield estimate 50.7 bpa, crop at 4.17 bbu
* Crop is 4th largest in history
* US ending stocks est 190 mbu
* Carryout tightest since 97 mbu in 13/14
* 20/21 world carryout 86.5 mmt
 
Wheat
* US ending stocks 877 mbu
* Ending stocks tightest since 752 mbu in 14/15
* World stocks at 320.5 mmt
* US becoming overpriced in global market
* Buyers continue to shop for feed wheat
 
Livestock
* 2020 US beef production 27.22 bil pounds
* 2021 beef production 27.37 bil pounds
* 2020 pork production 28.2 bil pounds
* 2021 pork production 28.5 bil pounds
* Economy questions weigh on demand

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