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E-Visor Reports: Market Watch

 
Wednesday, December 23, 2020
Demand remains the most supportive fundamental factor in the market right now. While there are weather concerns around the world and we are seeing technical buying develop, the most support is coming from demand at the present time. This is mostly on soybeans as the United States continues to sell more than needed to reach the yearly USDA objective. The United States is also crushing more soybeans than expected. This makes it highly likely that if usage continues on its current pace, we will deplete US reserves this year. US livestock producers have stepped up to say they do not have much coverage on the books and will likely be extending purchases as well. Not only could this support soybeans but corn and other feed grains as well. While this demand will fade once the South American harvest gets underway, we will likely see additional sales for export between now and then. We are also seeing elevated demand for US wheat in the global market as shipments of new crop bushels out of Argentina have been disrupted from labor issues. Demand may be disrupted by the upcoming Holidays but will be quick to resume in early January.  

Highlights
* Trade closely monitoring Covid updates
* reports indicate new strain is highly transmissible
* President Trump asks for more stimulus funding
* Heat expected to return to Brazil
* Ukraine announces no new trade limits in near future
* Farmers sales drop to near zero
* Ethanol margins remain under pressure
* Smaller ethanol production expected today
* Export sales released today due to Holidays
* Thin volume makes futures easy to manipulate

Corn
* Argentine planting to end on January 10th 
* Mexico remains main buyer of US offers
* Tighter balance sheet expected in Jan WASDE
* Domestic use being debated
* YTD export loadings up 201 mbu year ago
 
Soybeans
* China showing interest in new crop soybeans
* China accounts for 58% of current US sales
* YTD loadings up 548 mbu
* Market questions acreage increase estimate
* COFCO puts China’s 2021 imports at 100 mmt
 
Wheat
* EU total wheat production +11 mmt from last year
* Ukraine crop is 3 mmt smaller
* Argentine harvest slow, exports are delayed
* Russia not flooding market with inventory
* YTD inspections equal to last year
 
Livestock
* Beef in cold storage at 511.46 million pounds
* Pork in cold storage at 414.13 million pounds
* Pork bellies in storage at 23.11 million pounds
* Beef +7% from 2019, pork -28% and bellies -58%
* US hog inventory report today

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