AgriVisor Morning MarketWatch

Thursday, July 22, 2021
Trade is closely monitoring South American weather conditions. The La Nina that affected Southern Brazil and Argentina this year fully depleted soil moisture reserves in some regions. The concern now is that unless rains start to take place soon, these drought conditions will not be reversed ahead of the next production season. This is even more concerning with some forecast models indicating we could see a redevelopment of the La Nina weather pattern this year causing further stress in South America. The global market is counting on large production in South America to help offset small reserves in other countries, mainly the soybean situation in the United States. Planting is still several months away in South America which is limiting the volume of risk premium added to the market, but it is reducing futures’ losses. This uncertainty in South America has combined with the same feelings in the United States to limit farm-gate sales. Country movement in both North and South America is limited which is driving basis values higher. Fresh export demand has been sparse, however, which is capping basis improvement. The main river of today’s session is again weather as conditions and outlooks are mixed across the United States. While some forecast models are calling for cooling temperatures and rainfall others are keeping temperatures elevated for the next few weeks. This conflict is adding to market volatility. 

* Water conversation pushed in So America
* Parana River at all-time lows
* Trade questions overall US production
* Countries again limit food grain exports
* Latest US recession considered over
* Very little US crop poorly rated
* China to increase feed grain imports
* June Chinese feed grain imports a record 25.9 mmt
* US ethanol production declines last week
* Ethanol stocks jump a large 1.38 million bbl

* US DDG values under pressure
* US corn considered over-priced
* More reports of Brazil corn being re-sold
* Corn loadings unlikely to reach yearly projection
* World food grain supply to shrink 
* Soybean progress ahead of normal
* China scales back soybean imports
* Soy oil sales expected to decrease
* Global vegetable oils under pressure
* US crop rating below normal for six weeks

* Spring wheat rating near record low
* Spring wheat harvest set to begin
* Trade expects more Chinese business
* Canada crop down to 27 mmt
* Heavy rains may impact EU crop quality
* US beef values continue to decline
* Cash cattle mostly untested
* Weekly hog slaughter -4% from year ago 
* Hog weights are declining
* China predicts slowing hog slaughter

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