AgriVisor Morning MarketWatch

Thursday, April 29, 2021
Much of the focus of the market recently from the demand side has been on exports, but we are starting to see this shift to the domestic side. This is especially for renewable fuels as margins have started to increase for both ethanol and biodiesel. This has started to support domestic basis values on both corn and soybeans. The most support that is coming from this change is on soy oil. Soy oil futures are at historically high values on the board and processors are paying a premium to the futures for ownership. As a result, this is allowing crush facilities to pay a premium for soybean deliveries which in turn means a stronger basis. This same scenario is taking place in ethanol where margins have improved, and we are seeing a push for corn coverage. This does not mean exports are still not a factor in price discovery. While demand has slowed in recent weeks as harvest activity increases in South America, we are still seeing buyers surface for US offers. The fact that China is dominating Brazilian exports leaves little room for other buyers. While this demand is not as much as earlier in the marketing year, it is still generating competition for what bushels are available. 

* US processor bids keep firming
* US economic concerns rising
* Employment gains are at lower wages
* Weekly ethanol draw greater than expected
* US ethanol inventory lowest in 6 months
* US temperatures to warm 
* Global oil demand questioned
* Ukraine export values rise
* Brazil harvest pressure is lifting
* Typical seasonal highs are weeks away

* Brazil Safrinha expected to decline
* Reports of China canceling Ukraine purchases
* Argentine crop estimates rising
* So Africa plantings to increase 7%
* US exports +84% from last year 
* Considerable basis incentives being paid
* Crush margins over $2.00/bu
* Buyers worried over late summer supplies
* Firms raising Brazil crop estimate
* Export loadings +65% from last year 
* Marginal stands may shift to other crops
* May values highest in 7 years
* More reports of crop damage in US
* Yearly loadings +1% from last year
* Global wheat trade has slowed 
* Slaughter numbers are rising
* YTD cattle slaughter at 10.3 million
* YTD hog slaughter at 41.6 million
* Cash cattle bids soften
* China to produce more efficient hogs

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