E-Visor Reports: Market Watch

Thursday, August 27, 2020
We are starting to see just as much volatility in the cash market across the Corn Belt as we are in futures. This is not uncommon as we approach the fall harvest, which will reportedly get underway in some locations within the next two to three weeks. Buyers are now looking at remaining old crop inventory and weighing needs and adjusting bids accordingly. In some cases this has generated quick ship incentives, although windows of opportunity have been quite narrow. Wheat buyers are really trying to do is predict what will happen with newly harvested bushels. Basis has faded in many areas as buyers had thought farmers would market a large volume of bushels right out of the field. There is a building volume of carry in the market though, especially on corn, which may prevent this from happening. Farmers have also not been willing to part with as much old crop as expected. Not only it this creating basis opportunity, it is also bringing into question how big the new crop really is. While farmers have already marketed a large amount of new crop bushels, their unwillingness to extend sales has believing the crops might be smaller than though. This is especially the case where crop damage has taken place in the Western Belt. 

* Rains to develop in Corn Belt, may be too late
* Damage from Hurricane Laura being assessed
* US ethanol production up last week, stocks rise also
* Ethanol production -10.3% from last year
* US ethanol reserves -2.58 mil barrels from last year
* China/So Korea to hold trade talks
* EU continues to lose crops from drought
* Gasoline futures at 5-month high
* China to import record volume of US crude in Sep
* Market searching for fresh news 

* Brazil Safrinha harvest 86% complete
* Brazil exports rising
* Mexico remains primary buyer of US corn
* New crop US sales total 2nd largest in 30 years 
* Fund short position smallest since March
* China remains primary destination for US soybeans
* China pegs 2020 imports a record 40 mmt
* US soybean sales total largest since 1990
* More sudden death reported in US crop
* Brazil production has been understated by 14.4 mmt
* Russian crop estimates rise
* Russia’s crop up 6 mmt in past month
* Argentine crop 2-3 mmt under USDA est
* China shopping for more imports
* Favorable weather to start planting in US
* US pork shipments up 52% on the year
* US beef shipments +1% yearly
* China’s beef values up 15.8% in past year
* Heat stress affecting cattle gains
* Large US pork supply being questioned

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