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E-Visor Reports: Market Watch

 
Friday, August 28, 2020
The majority of today’s session will be spent getting final positions in place ahead of month end. Next Monday is first notice day on the September contracts which will be more of a factor for corn and wheat than soybeans as most soybean contracts were rolled directly to November. We are also quickly approaching the harvest season which will cause a shift in how trade looks at weather. While there is still time for rains to benefit developing crops, they will also generate concerns of harvest delays if conditions turn overly wet. There is plenty of old crop inventory to satisfy demand so delays will not impact the grain supply, other than for those who decided to not extend coverage. What rains can do at this time of the year is cause quality issues and make it harder to crops to dry down normally in the field. This is especially the case on corn. The greatest concern on soybeans is rain causing pods to swell and burst. These are worst case scenarios, but any reduction to production is likely to get market attention given the large production estimates we have. 

Highlights
* Trade assessing Hurricane Laura damage
* Most commodity values back to pre-Covid levels
* Brazil seeing more demand than the US
* Renewable fuels become political debate topic
* La Nina continues to build
* US temps to drop to below normal levels in some regions
* US ag exports forecast at $140.5 billion in 2021
* Ag export projection +$5 billion from 2020
* Energy demand remains depressed
* China claims flooding caused little crop damage 

Corn
* Ratings expected to decline again next Monday
* Trade closely monitoring IA, NE crops
* So Africa now backs off production estimate
* US crop still record sized 
* Export basis firming
 
Soybeans
* Further reduction to ratings likely
* Rally in soy to encourage SAM plantings
* China buys more from Brazil than US
* US crop still one of US’s largest
* Ending stocks may still remain above 500 mbu
 
Wheat
* US wheat exports +3% on the year
* US values pressured by global production
* Winter wheat production +5 to 10% this year
* EU wheat crop 6 mmt under USDA estimate
* Argentine losses build from drought
 
Livestock
* China to auction 10,000 mt pork today
* Chinese pork auctions total 500,000 mt
* Weekly beef sales 11,800 mt; -40% from week ago
* Weekly pork sales 39,443 mt; +91% last week
* China accounted for 28.4% of export demand

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.