E-Visor Reports: Market Watch

Monday, August 24, 2020
There is little doubt trade will react to the Pro Farmer tour numbers in today’s session. Pro Farmer is predicting a corn crop that is 460 million bu less than the USDA and their soybean crop estimate is 70 million bu smaller. As always this opens up debate over data collection from both sides and how it is interpreted. Once again, trade will be heavily focused on the crop condition report ratings that will be released this afternoon. Trade fully expects the ratings of corn and soybeans to decline as recent weather has not been favorable for crop growth. While it is not uncommon to see ratings decline at this stage of the growing season, yield estimates remain record sized on both corn and soybeans. To see these become a reality we will need to see ratings hold at high levels right up to harvest. To see private analysts start to back off on yield estimates in the next few weeks would not come as a surprise. While this will impact futures, we are now at a stage where more actual yield data will come in from the field. Not only will this tell us yield potential but crop quality as well. This may end up being more of a factor for price discovery as trade is hoping for a higher quality corn crop to blend with remaining old crop bushels that suffered from quality issues last year. This caused some hesitation to importers of corn all marketing and limited price potential. Any repeat and we will likely see the same hesitation of buying again. Trade will also be heavily focused on weather forecasts as models indicate hot, dry conditions will last through at least the end of the week for much of the Corn Belt.

* PF corn yield 177.5 bpa, crop at 14.82 bbu
* PF soybean yield 52.5 bpa, crop 4.36 bbu
* Will take weeks to determine Iowa losses
* Drought continues to impact Argentine production
* Ukraine grain exports already -20% this year 
* Trade waiting for details of next Chinese trade talks
* Producer selling again slows
* Two tropical storms to hit US Gulf this week
* Tropical storms to disrupt exports
* China has covered 47% of Phase 1 requirements so far

* Lower rating expected tonight
* Large yields still predicted
* Starting to see quick-ship incentives
* Corn Belt harvest in 2-3 weeks
* Ethanol values rally
* Rumors of Brazil sales switching to US origination
* High pod counts weigh on trade
* US crop forecast may rise
* China needs starting to be covered
* Lower ratings likely tonight
* US struggles to remain competitive
* Spring harvest builds reserves
* More acres of winter wheat plantings expected
* Dollar shows less influence on values
* Global production losses favor US
* August on feed at 11.3 million head; +2% from 2019
* July placements up 11% on the year at 1.89 million
* July marketings 1% under 2019 at 1.99 million
* Cash markets remain high
* Consumer demand showing volatility

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.