E-Visor Reports: Market Watch

Wednesday, September 02, 2020
South American weather is becoming more of a factor in price discovery. The majority of the attention on this has centered on Argentina and the drought that has impacted the country’s production. This is especially the case in wheat. We are now seeing more interest on Brazil though as that country will soon be planting its soybean crop which is expected to increase substantially from last year. In order for crop size to increase as much as predicted Brazil will need to expand acreage, and that typically means farmers will want to see favorable planting conditions. While not the worst, soil conditions across much of Brazil are drier than normal right now. During August Brazil only received 75% of its normal precipitation. While not a huge concern right now, trade will be monitoring this shortfall to see if it becomes a longer-standing trend. If it does, we will likely start to see adjustments made to Brazil’s crop estimates. We are also seeing continued interest on US weather with a slight shift in focus. Colder than normal temperatures are expected across much of the Corn Belt going into next week, with chances of frost being given. While a major killing event is not expected, anything that might impact the crops is being monitored. What is more of an immediate weather factor is the rains that have moved across the Corn Belt, even if their benefit is questionable. 

* Rains move through parts of Corn Belt
* Global commodity supply remains large
* Trade monitoring early frost potential
* Equity markets continue to rally
* US dollar at 28 month low
* Higher ethanol stocks expected today
* Brazil may extend ethanol import waiver
* Canadian production up despite lower plantings
* Ukraine lowers grain export forecast
* Covid Relief Bill lowered to $1.3 trillion 

* Record corn values seen in Brazil
* Funds have been short in corn for 54 weeks
* This the longest lasting fund short
* Global corn supply remains large 
* Ukraine lowers export forecast by 5 mmt
* Soy/corn ratio at 2.65:1
* Ratio favors soy production
* Global soy supply building
* Funds remain buyers in soybeans
* Global oilseed market softens
* Big losses in Argentine crop
* Parts of Argentine report 50% losses
* US wheat commitments highest since 2013
* German crop -5% on the year
* Russian wheat holding benefits US values
* Seasonally beef demand starts to decline
* Grilling season may last longer 
* Restaurant demand remains light
* Delay in stimulus hampers meat sales
* Slaughter continues to build

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