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E-Visor Reports: Market Watch

 
Tuesday, September 01, 2020
As expected, the condition rating of the US crops declined last week. Corn is now rated 62% Good/Excellent, down 2 points on the week. Soybeans are now rated 66% G/E, down 3 points on the week. These declines were both within trade estimates. The state that is getting the most attention is Iowa, where the corn rating slipped 5% and the soybean rating was down 6% as drought expands across the state. The majority of today’s session will include new month positioning by the funds. We will also start to see more positioning for the upcoming WASDE report that will be released on the 11th. This will be the first one to contain actual field collected data, and some analysts are predicting sizable changes to yields and production. While this is possible, we always need to remember that demand is only one side of the balance sheets. It is not out of the question the USDA may also alter demand forecasts, especially if they believe grain stocks will tighten. More than likely we will need to wait until future reports for sizable changes, at least until post-harvest. Trade will also start to closely monitor the upcoming harvest activity which may be taking place by the time the September report is released. 

Highlights
* New month positioning begins
* Grains/Soybeans post sizable gains in August
* Crop ratings decline as expected
* August one of 25 driest since 1895
* Little crop damage reported from Hurricane Laura
* Brazil tariff cuts questioned
* Technical gaps on charts give bearish signals
* Total long fund position greatest in over a year
* China/Australia trade tensions build
* Market still waiting for Covid relief package 

Corn
* US corn 62% G/E
* Corn crop is 12% mature
* Dec corn +37 ¾ cents in August
* China may be close to depleting corn reserves 
* Ethanol demand is stalling
 
Soybeans
* Soybeans +63 ¼ cents in August
* Soybeans 66% G/E
* 8% of soybeans dropping leaves
* July crush data after close; 183 mbu estimated usage
* 56% of new crop sales are to China
 
Wheat
* Spring wheat 69% harvested 
* Winter wheat harvest complete
* December wheat +13 ½ cent in August
* Russia withholds wheat from market
* High values may encourage more plantings
 
Livestock
* Wholesale values continue to rally
* All eyes on Labor Day demand
* Hopes for more exports remain supportive
* China accounts for 38% of US pork trade
* Cash cattle holding at $104-$105

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.