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E-Visor Reports: Market Watch

 
Wednesday, October 07, 2020
We are starting to see many private analysts release their production updates ahead of the official update on Friday. For the most part, private analysts are predicting crop sizes of 14.9 billion bu on corn and 4.35 billion bu on soybeans. While these are less than what most analysts had been forecasting, they are close to what the USDA released in the September balance sheets. Not matter what is released in Friday’s report, trade may instead focus on actual field collected data that is coming out of the field. We also need to remember that production will only be half of Friday’s reports. Just as much if not more attention will be on the demand side. We have seen elevated demand on all US commodities since the data was released last month and increases to usage would not come as a surprise. The most interest will likely fall on soybeans where China continues to buy large volumes. While this is friendly, the USDA may still want to wait until we surpass current projections before extending demand much more than already predicted. 

Highlights
* Weekend hurricane in US Gulf
* Storm appears stronger than first thought
* New contract highs in commodities
* No stimulus package expected
* US economy shows signs of slowing
* Brazil planting now underway
* Brazil harvest likely delayed 2 weeks
* WASDE report on Friday
* Trade expects little change to production
* Demand expected to change considerably

Corn
* Private corn est yield close to USDA
* China commitments of US corn at 392 mbu
* 40% of US corn sales are to China 
* Argentine corn planting at 15%
* Argentine crop ratings decline
 
Soybeans
* Interior basis better than export values
* Heavy canola movement pressures soybeans
* New life of contract high made on Nov
* Brazil old crop sales slowing
* Soybeans technically overbought 
 
Wheat
* Australian to export 18 mmt this year
* Ukraine wheat values up 40% this year
* Argentine wheat just 8% G/E
* Argentine soil moisture only 58% adequate
* US wheat sales up 8.4% last year
 
Livestock
* Cattle slaughter rising
* Cattle slaughter still -4% on the year
* Hog slaughter starting to slow
* Hog processing +1% last year
* Grain rally pressures livestock margins

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