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E-Visor Reports: Market Watch

 
Thursday, August 20, 2020
Trade will again pay close attention to this morning’s weekly export sales report, especially on soybeans. The United States has seen a considerable build in Chinese soybean demand again, and bookings are now approaching what we thought China would take for the entire year. To see a booking total on soybeans on the top side of 2 million metric tons today would not come as a surprise given the flash sales that were announced last week, and some feel they may reach 3 mmt. While these bookings have been supportive, the USDA is dialing in large sales in its carryout projections, so they are needed to prevent a further build in ending stocks. The real question in the market is how long this buying may last, not just from China, but from all sources. One of the greatest benefits for US sales is the weak US dollar and how it is making low values on US commodities even more attractive. This is even negating out much of the appreciation we have seen in commodity values, which is further benefiting US farmers. We will also see interest on the old crop sales totals to get a better idea of how many old crop sales may be rolled to new crop. This is not uncommon at this stage of the year. 

Highlights
* Outside markets turn negative 
* All eyes on export demand
* US ethanol stocks rise in weekly report
* US ethanol production -9.5% from last year
* US pasture ratings continue to decline
* Domestic demand remains high
* Fringe area crops look better
* Little disease being reported in crop scouting
* China/Australia trade tensions build
* Taiwan wasn’t to build US trade relations
 
Corn
* Limited Brazil exports
* Analysts lower yield estimates, still high
* Texas crop in poor shape
* China to increase corn imports
* Contract rolling to capture carry noted
 
Soybeans
* US crush continues to increase
* Lack of DDGs supporting meal
* Analysts leave yield estimates unchanged
* Thoughts China may have needs mostly covered for now
* So America to start planting in 2-3 weeks
 
Wheat
* Ukraine to limit wheat exports at 17.5 mmt
* Last year Ukraine exported 20 mmt
* UK predicts wheat yields will decline 30-35%
* Spring wheat quality remains high
* Global wheat supply large, is growing
 
Livestock
* Slaughter numbers starting to slow
* Cattle values at pre-Covid levels
* Hog supply remains negative on market
* Trade expecting large Labor Day demand
* August COF report Friday

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