AgriVisor Morning MarketWatch

Tuesday, January 19, 2021
Improved weather conditions and building worries over the spread of global Covid cases weighed on trade to start the week. There is little doubt that this week’s trade will pick up where last week ended, with rationing being seen on most contracts. This started on soybeans and shifted to corn last week after the USDA cut ending stocks to 1.5 billion bu on the monthly WASDE report. While this is a historically adequate number, it lowers the stocks to use on corn to 10% which is where rationing is warranted. Same as with soybeans though, other source of corn in the global market are slowing their sales, mainly Ukraine. We are starting to see corn out of Argentina move into the global market though which is helping limit US sales. This does not mean we do not need to give up on rationing soybeans, however. The US soybean carryout is currently estimated at 140 million bu and the case can be made this is too high, especially with recent flash sales and crush figures. The United States almost needs to see all exports stop to see this carryout level hold, which seems unlikely. The answer to how much demand we continue to see will be determined by the South American crop and how much of the world’s needs it can satisfy. 

* Widespread rains move through So America over the weekend
* Counties impose new restrictions due to Covid
* Demand for US sorghum continues to rise
* China imports at record volumes for 2020
* Chinese delegation expected to visit US soon
* Wheat acres may shift to soybeans
* Brazil transit strike expected on Feb 1st 
* Argentine corn rating up 7% last week
* US dollar expected to recover
* President Elect Biden release fiscal package details 

* IGC world corn carryout tighter than USDA 
* More countries to limit corn exports
* Ukraine crop 6 mmt under last year
* Chinese imports remain strong
* Ethanol production expected to rebound late 2021
* NOPA crush for Dec a record 183.16 mbu
* NOPA 2020 crush a record 2.08 bbu
* Brazil soy plantings +3.4% this year
* Brazil harvest 3 wks behind normal 
* Most analysts predict 100 mbu ending stocks
* Global wheat supply remains large
* May slow late-season demand for US 
* World food inflation supports values
* Winter wheat acres may decline
* Yearly sales 79% of estimates
* Asian Bird Flu continues to rise
* Outbreak is worst since 2000’s 
* Deferred cattle remain strong
* Export demand remains elevated
* Building pork supply weighs on hogs

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