Morning Comments; Wednesday, February 19th, 2020
Agrivisor - SETZ - Wed Feb 19, 6:38AM CST

Many of the factors that impacted yesterday’s trade will again have an influence today. The most talked about one of these was trade news with China and how we may soon get an indication of their import intentions. The market reaction was this would favor soybeans and pork, and while that may be true, the fact no quantities have been announced is a concern. This lack of clarity weighed on soybeans yesterday while the grains posted a sizable recovery, especially wheat. Soybeans are also being pressured by ongoing reports of an “exceptional” crop in Brazil. The latest reports indicate the crop could reach 126 mmt this year, 11 mmt larger than a year ago. Wheat was the well-defined leader yesterday as Australia reduced their crop due to drought and fire loss. Wheat has been in a corrective phase for several weeks so to see a breakout was not surprising, but the size of the recovery was. Wheat is now within a short distance of the recent highs set in January. Corn and soybeans were also pressured yesterday by the baseline data that continues to come out of the USDA. This data is now indicating ending stocks of corn at 2.8 billion bu and 518 million bu on soybeans for this coming year. These would both be larger than the ending stocks being predicted for this year, corn seeing the biggest increase. While there are many factors that will change in these scenarios and formulas, the simple fact the USDA is expecting larger ending stocks is a limiting factor. More answers to these questions will come from the Ag Outlook Forum at the end of this week. Fresh news remains sparse which is weighing on futures and limiting all gains.


* Cargo vessels destined for China re-routed

* Economic losses from Coronavirus build

* Backlogs at Chinese ports limit imports

* Trade remains hopeful on Chinese tariff reductions

* Questions remain on import volumes

* Baseline data indicates large carryout will continue

* China continues to buy commodities from other sources

* US dollar continues to rally

* Fresh news is sparse


* China buys Ukraine corn

* Safrinha crop estimates rise

* SAM weather favorable for crop development

* Weekly inspections hit marketing year high

* Baseline carryout at 2.75 bbu


* Brazil yields remain above expectations

* Brazil crop is 70% sold; 54% year ago

* Brazil harvest is 21% complete

* Questions remain on Chinese demand

* Baseline US carryout at 518 mbu


* Mild weather favorable for EU crop

* Australian crop smallest since 2008

* Global supplies still adequate

* US uncompetitive in world market

* Export business mostly routine


* China approves all US poultry for import

* Spec traders reduce long livestock positions

* Last week’s cattle slaughter +12,000 from year ago

* Hog slaughter +99,000 from last year

* Trade unclear on Chinese import quotas

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


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