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E-Visor Reports: Market Watch

 
Friday, September 18, 2020
We are starting to see a gradual shift in market attitude and focus. For the past several months all interest has been on production which is not uncommon during the growing season. As we get into the harvest season more attention is placed on demand. We have seen a considerable build in demand in recent months, especially from China. In fact, this buying has pushed new crop bookings to record levels for this time of year. The question in the market now is how long this demand will last. It is thought that China may have soybean needs covered through December. They typically start taking new crop soybeans out of Brazil in January or early February, so the window for additional sales may be closing. There is more opportunity for corn sales to China where bookings may linger into the spring months. The concern is obviously what will happen if China does scale back its purchases, as demand from other sources is not as high. In last week’s balance sheets the USDA predicted a 540 million bu increase to soybean demand from last year, and a 1.045 billion bu increase to yearly corn demand. It is not out of the question that we could see corn and soybean demand walked back enough to see any declines to production from this point forward. While this is all possible, right now soybeans are focused on little other than the sales we have seen to China and this is giving us major market support. 

Highlights
* Farmer sales remain light on market rally
* US refiners denied blender waivers to receive subsidies instead
* US commodities lean towards overbought
* Dry weather to advance harvest activity
* Maturity sped up by recent weather
* Long-range outlooks call for La Nina conditions this winter
* Brazil to see rains, encouraging planting
* Barge movement back-logged from Sally
* US dollar remains under pressure
* Markets moving in contra-seasonal patterns

Corn
* Brazil exports picking up
* EU lowers corn carryout
* Export basis holding steady
* Interior basis becomes choppy
* Weekly export sales at 63.4 mbu
 
Soybeans
* US crush margins under pressure
* Delays to Canadian canola harvest
* US harvest to advance next week
* Brazil new crop export forecast does not match production
* Weekly sales total 90.3 mbu
 
Wheat
* EU non-bloc exports -42%
* France continues to lower crop estimate
* Global wheat stocks are building
* Rains improve soils for winter seeding 
* Weekly sales just 12.3 mbu
 
Livestock
* Beef exports last week 14,274 mt; -8% previous week
* Pork sales 50,568 mt
* China buys 71% of pork sold
* China to auction 20,000 mt pork today
* Pork values in Germany -14% after ASF discovery

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