Menu
 

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. 

Highlights
* 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 

Corn
* 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
 
Soybeans
* 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
 
Wheat
* 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
 
Livestock
* 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

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.