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AgriVisor Morning MarketWatch

 
Wednesday, December 09, 2020
Final positioning ahead of tomorrow’s WASDE update will take place today. While it has been stated several times, the most interest in this release will be on the domestic soybean balance sheets and South American production. While nearly every analyst expects to see reductions to all of these figures it may not take place this month. The USDA may wait until January when the final US production numbers are released to alter US balance sheets a significant amount, even though demand has been strong in recent weeks. The fact that weather has turned more favorable in South America may also limit changes to production in that region. Aside from production in South America, a story that is getting more attention is the volume of old crop inventory still being held by those countries. Brazil has mostly exhausted is exportable supplies of soybeans and corn, but the same is not true for Argentina. In fact, Argentina is thought to be sitting on record supplies of both right now as high taxes have prevented sales from taking place. Farmers in the country are selling just enough to generate immediate cash flow coverage. This has been beneficial for the US crush industry as it has created a void in the world market on soy products.  

Highlights
* Funds have trimmed long positions
* Concerns with Covid vaccine reactions being noted
* Ethanol reserves expected to build in today’s report
* Brazil production still projected to be record large
* US/China political tensions rise
* Main issues are on US sanctions against China
* Weather conditions improve in South America
* Buyers are surfacing on market breaks
* US country movement remains light
* WASDE report on Thursday

Corn
* US loadings are starting to increase
* China shifting to corn buying
* Brazil values remain volatile
* Concerns raised on US corn quality
* Argentine crop is 35% planted
 
Soybeans
* Chinese November imports 9.6 mmt
* Chinese Nov imports +16% from 2019
* Soybean values weaken in China
* Analysts believe Chinese demand is underestimated
* Brazil soy crop 90% planted
 
Wheat
* Global production rising
* Most notable is in Australia
* Canadian crop +8% from year ago
* French wheat highly rated
* Australian exports are slowing
 
Livestock
* October beef exports 258 million pounds, +8.8% on the year
* October pork exports a record 589 million pounds
* China bought 135.6 million pounds of pork in October
* China monthly purchases +43% from last year 
* US restaurant demand is down

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