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E-Visor Reports: Market Watch

 
Monday, July 27, 2020
The majority of this week’s activity will focus on month end positioning. This will be most evident on soybeans where the August contract goes into delivery. We will likely see heightened positioning on all contracts though as funds have been more active in the month of July than the past several months. We will continue to see weather influence market activity this week as not only is corn starting to enter the ear fill stage, but now is when soybeans can be more affected by less than favorable weather conditions. This will start to put more emphasis on crop conditions and weekly reports. We are now at a stage where if crop condition does not make declines given weather up to this point, it may not decline enough to significantly impact production. While condition is not a reliable indicator of yield, it does give the indication of overall crop health, which does indicate how high yields might be. This brings in the whole debate on crop genetics and how today’s crops are better able to withstand adverse conditions. Field scouts are quick to state that while crops have been subjected to less than ideal conditions this growing season, they have had just enough reprieve to limit losses. This does not mean crop will not be smaller than initially projected, but that losses may be smaller than in a year where less than perfect conditions persisted all growing season. As always, the question now is if any loss of yield will significantly impact balance sheets, or if we see demand erode enough to negate losses to production. 

Highlights
* End of Month positioning builds
* Weather interest shifts to soybeans
* La Nina to impact SAM production, mainly Argentina
* La Nina to build from Sep to Dec
* Argentina reports no additional export taxes
* Country movement slows
* High yield potential reported in WCB
* Ethanol use needs to average 76.4 mbu/week to meet USDA est
* July on track to be one of warmest in history
* US soil moisture adequate
* US/China trade tensions build, even with trade happening
 
Corn
* IGC lowers world corn production
* Ukraine ups crop size, export potential
* La Nina to impact Argentine crop
* US ethanol production remains pressured
* EU raises crop estimate
 
Soybeans
* Gulf premiums rise
* Processors push for deliveries
* Flooding impacts Canadian canola crop
* EU sourcing needs from Brazil
* Soy exports above USDA est for the year
 
Wheat
* Egypt to inspect wheat at point of origin
* Russian wheat cheapest in global market
* Drought impacts global production
* German crop lowered despite recent rains
* Rains do benefit US spring crop
 
Livestock
* July 1st COF 100% year ago at 11.438 million
* COF 2nd highest since 1996
* June placements at 1.8 million, +2% year ago
* June placements 1st increase in 5 months
* June marketings +1% from year ago

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