E-Visor Reports: Market Watch

Wednesday, July 29, 2020
Trade is already starting to look forward to next week’s ratings report and expects to see another improvement to the conditions of the US corn and soybean crops. This week both improved 3% in the Good to Excellent range, putting them at 72% G/E. What is more of a factor is that very little of either crop is rated poorly. This is why we have started to see analysts increase their yield estimates, especially on corn. A few are now predicting a corn yield above the USDA, with some topping the 180 bushel per acre level. While this seems like a stretch, it is fully possible. Current weather conditions are favoring not only a higher corn yield but favoring soybean production as well. There are very few threats on the horizon for upcoming weeks, further reducing crop stress. While this does not necessarily mean high yields, it reduces the chances of crop loss. Trade is also closely monitoring the outside markets as concerns over a resurgence of Coronavirus are impacting trade. The main threat is another slow down in the US economy when it has yet to recover fully from the initial collapse last spring. This has caused the US dollar to drop to its lowest level in two years, which tends to be favorable for commodity exports. We have seen several investors flock to the gold market though, driving the value of that commodity to its highest level in nine years. Economists are taking this as a sign investors are concerned with the long-term outlook of the US financial market, which could easily cause a lack of fund buying in the grains and soybeans.  

* Flash sales steak on soybeans ends at 11 days
* Analysts starting to raise yield estimates
* Transit costs are rising, will impact basis
* Weak dollar makes US more competitive
* Some US forecasts turn drier
* Gold at record highs
* US dollar collapses, Crypto currency rallies
* More Covid aid expected for agriculture
* consumer confidence is dropping
* Market volatility to increase
* Record high in Chinese corn supports US
* South Africa crop to rise 37% this year
* Safrinha harvest 55% complete
* Speculators cut corn short in half
* Privates predict corn yield +5% from trend
* China continues to buy US soybeans
* China filling gap until SAM harvest
* Limited weather stress to start August
* Analysts raise yields 2 bpa
* Domestic demand softens
* Russia raises crop forecast
* French soft wheat crop -26% this year
* France wheat crop smallest since 2016
* Weak dollar provides support
* US wheat supply growing
* China to auction 10,000 mt pork
* Boxed beef values firming
* Very light cash trade
* Yearly rise in belly demand supports pork cutout
* Slaughter numbers back to normal

RISK DISCLAIMER: The risk of loss in trading commodity futures and options is substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. The information contained in this report is believed to be reliable but is not guaranteed to accuracy or completeness by AgriVisor, LLC. This report is provided for informational purposes only and is not furnished for the purpose of, nor intended to be relied upon for specific trading in commodities herein named.  This is not independent research and is provided as a service.  As such, this is considered a solicitation.