E-Visor Reports: Market Watch

Tuesday, August 11, 2020
The rating of the US corn and soybean crop was little changed from a week ago, which is in line with what trade was expecting. The US corn crop rating declined 1 point and now stands at 71% Good/Excellent. The US soybean crop rating improved 1% to now stand at 73% G/E. Even with a slight decline on corn, these ratings are some of the highest in history for this time of year. These ratings are also why most traders think the crops will be larger than previously thought in tomorrow’s WASDE report. The question now is what may happen next week after yesterday’s storms moved through the Midwest bringing high winds and reports of flat corn fields. Given the start of harvest in some parts of the Deep South, actual field collected data will soon start to replace condition reports on a whole. The majority of today’s session will be spent getting final positions in place ahead of tomorrow’s WASDE release. For the most part, analysts are expecting to see an increase in production and ending stocks. The anticipation of this data has been pressuring the market in recent sessions, and hopes are the release of the numbers will bring an end to recent selling. Given the volume of the market leaning towards a negative return, even neutral numbers could end up being friendly. 

* US could see 25 named storms this year
* Chinese commodity demand likely underestimated
* Flooding causes production losses in China
* Chinese 2020 Ag purchases at $7.3 billion
* China’s demand up 6% from last year; -25% from 2017
* Imports had been predicted to increase 50% from 2017
* Funds add to short positions
* Ethanol margins negative from September forward
* Trade waiting on storm damage reports 
* WASDE report tomorrow; FSA to update acreage as well
* August yield above trade estimate in past 5 years
* Ukraine predicts record production
* Interior basis becomes volatile
* Corn 71% G/E, -1%
* Corn 11% dented; 12% is average
* Soybeans 74% G/E; +1%
* Pods set on 75% of crop, normal is 68%
* Crush margins trending higher
* US average crush now at 92 cents/bu
* Brazil crop estimates rising
* Winter wheat 90% harvested
* Spring wheat 15% harvested
* Spring wheat 69% G/E
* Canadian crop est 5 mmt above USDA
* Less worry on global production losses
* So Korea/Japan leading beef importers
* Cattle slaughter is slowing
* China accounts for 40% of pork demand
* Hog slaughter steady with last year
* Consumer demand a concern

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