E-Visor Reports: Market Watch

Wednesday, August 12, 2020
Trade will finally receive the much-anticipated August supply and demand report today. Thoughts of higher yields and ending stocks have been well-voiced by market analysts ahead of this. The average trade guess is we will see corn yield increase by 2 bushels per acre from July and soybean yield will increase 1.5 bpa. While not significant, these are enough to give us larger crops. Production from these would increase by 160 mbu on corn and 140 mbu on soybeans. Old crop ending stocks are not expected to change much from last month, but new crop is anticipated to increase by 150 mbu on corn and 100 mbu on soybeans, putting both at very comfortable levels. A few outliers believe ending stocks could reach as high as 3.2 billion bu on corn and 700 million bu on soybeans which would not be price friendly. The greatest unknown in these figures may be what is done with demand. New crop demand has been higher than usual, with new crop soybean sales to China already at a six-year high. While this demand will be a large influence on the market, we will also receive the weekly ethanol manufacturing data today. Ethanol production has slipped in recent weeks, but at the same time stocks have been building. While still well below last year’s reserves, this is a trend that will closely be monitored, especially with declining ethanol margins. 

* WASDE data at 11:00 AM CT
* FSA will also update acreage, including prevent plant
* Canola pressures US soybean values
* Canada shipping canola to China
* More concerns over crop loss in Iowa/IL
* Storage loss may be more of an issue
* Much cooler temps predicted for US
* Crude oil at 5-month high
* Gold down over $100.00/ounce yesterday
* US farm groups asking for more Covid relief
* Yield est 180.5 bpa; +2 from July
* Crop est 15.17 bbu; +176.5 mbu
* 2019/20 carryout est 2.27 bbu, +21 mbu
* 2020/21 carryout est 2.83 bbu, +176 mbu
* Global carryout est 319.4 mmt
* Yield est 51.2 bpa, +1.4 bpa from July
* Crop est 4.26 bbu, +124.5 mbu from July
* 2019/20 ending stocks 618 mbu, -2 mbu
* 2020/21 carryover 526 mbu, +101 mbu
* World carryout 98 mmt
* All wheat production est 1.83 bbu, +9 mbu
* 2020/21 carryout est 948 mbu, +2 mbu
* World wheat carryout 314.7 mmt, -100,000 mt
* Rising global wheat values favor US offerings
* Global production losses less concerning
* Chinese pork values remain high
* Cattle futures remain at a premium to cash
* Trade starting to weigh Labor Day demand
* Pork cutout slips lower
* Hogs technically oversold

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