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E-Visor Reports: Market Watch

 
Wednesday, August 05, 2020
We are now at a stage where we start to see a shift in weather focus. Until now the majority of weather influence was on corn futures. Now we will start to see a divide between corn and soybeans as pod setting and filling gets underway. As we move through August this will become more evident. This does not mean corn will not be impacted by weather anymore, but it will have to share the spotlight. If we do not see any adverse conditions develop in the next few weeks however, this will change, and weather will quickly become less of an influence on corn and soybeans both. We will also start to see more attention on South American weather over the next several weeks as planting starts to get underway in those countries. This may be more of a factor this year as there is a La Nina event building. These patterns tend to bring drought conditions to Argentina, which has already been seen in the country. Analysts in Argentina have started to lower yield estimates as a result, with both corn and wheat seeing decreases. There are also thoughts the rainy season in Brazil may be delayed due to the La Nina. We have seen large increases to Brazilian production estimates for the upcoming year and these may be questioned with even the hint of less than perfect production conditions. 

Highlights
* Drought conditions intensify in Argentina
* US biodiesel production on the rise
* Chinese economy recovering faster than US
* US crop estimates, carry out rising
* Adage “big crops get bigger” comes to mind
* Ethanol production likely to fall short of estimates
* US/China political tensions build
* US/China to hold “high level” talks August 15th 
* Dry conditions a benefit for SAM harvest
* US farm bankruptcies slow in 1st half of 2020
 
Corn
* New crop export sales 15% ahead of last year
* China has booked a record 225 mbu new crop corn
* Chinese domestic corn auctioned at $7.40/bu
* Dry weather to speed up Brazil harvest
* Lower quality wheat may displace feed demand
 
Soybeans
* Soy sales other than China at a 5-year low
* Processor bids firming 
* Veg oil demand rising
* Brazil sales 95% of projections
* Soy crop rating highest since 1994
 
Wheat
* Frost damage in Argentine crop
* Russian crop forecast rising
* Largest Russian yields close to export terminals
* Ukraine milling wheat supply to decline 40%
* Brazil predicts record crop
 
Livestock
* No cash trade this week
* Slaughter numbers remain strong
* Pork cut outs stronger
* Wholesale beef continues to support futures
* China to start trading own futures

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