Morning Comments; Tuesday, February 11th, 2020
Agrivisor - SETZ - Tue Feb 11, 5:39AM CST

The main story in today’s session will likely be the release of the monthly supply and demand report. On the domestic side we will see all attention on demand, mainly exports. Corn exports have continued to trail expectations although we have seen a bump in demand in recent weeks. The question is if this is enough to keep the USDA from cutting its yearly export forecast. Soybean exports remain strong, but this is the stage of the year where we start to see more competition from South America. This may prevent any changes from taking place on that commodity. Domestic demand may not change all that much either. Ethanol production has been choppy in recent weeks but not to a point where any significant changes would be warranted. The same as true with crush on soybeans. One big unknown heading into this report is what might be done to Chinese demand. While it was announced the Phase 1 agreement would be factored into prospective demand, the loss of demand from the Coronavirus may negate this. Any disruption to Chinese demand will only be temporary though as the country still needs commodities, including soybeans and meat. It is not out of the question we could see more alterations to global numbers today. South America’s harvest is getting underway and yields are better than expected in Brazil. This is on both corn and soybeans. We have already had private analysts up their Brazilian soybean crop estimate and the USDA will likely follow. The only real question is by how much. We may not see as much change to corn production as planting of the Safrinha crop in Brazil is off to a less than perfect start. Once this data is released trade will start to work it into long range outlooks, including the Ag Outlook Forum numbers that will be released at the end of the month.

Highlights

* WASDE report at 11:00 AM CT

* CONAB data also released today

* SAM crop ratings remain high

* US dollar highest value since October 2015

* China assures it will meet trade goals

* Wet soils already a concern in Corn Belt

* Govt to invest $30 billion in US rail system

* Exports falling short of needs

* China has bought a reported 20-25 soy cargoes this week

* China to spend $10 billion to control Coronavirus

Corn

* US carryout est at 1.86 bbu

* Global carryout 297.7 mmt

* Argentine corn 59% Good/Excellent

* Market needs production scare to rally

* Global market well supplied

Soybeans

* US carryout at 443 mbu

* World carryout 97.3 mmt

* Chinese demand at 5-month low

* Low values attracting speculators

* Argentine crop 100% fair or better

Wheat

* US carryout estimated at 954 mbu

* Global carryout 287.5 mmt

* Strong dollar deters buyers

* China sows more interest in EU wheat

* Little winterkill on wheat

Livestock

* This cash cattle trade

* US beef supplies to tighten

* Hog cut outs weaker

* Hog slaughter slows

* Pork exports down 13.6% last week

This commentary is the sole opinion of Karl Setzer, Senior Commodity Risk Analyst for AgriVisor, LLC. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to send an e-mail to ksetzer@agrivisor.com.




 

Market Commentary provided by:

Karl Setzer Grain Commentary