Morning Comments; Tuesday, March 3rd, 2020
Agrivisor - SETZ - Tue Mar 03, 6:36AM CST

We are starting to see a shift in opinion when it comes to South American weather and crop outlooks. Rains continue to fall in Northern Brazil and are delaying soybean harvest. Progress is now 2% behind the five-year average, and 10% under the number of soybeans harvested a year ago. While this has not impacted yield in that region, it has affected the number of acres that will likely be seeded for the Safrinha crop. Harvest is much more advanced in Southern Brazil, with the leading soybean producing state of Mato Grasso reporting 83% of the crop is out. While harvest is advancing in southern states, soybean yields are becoming questionable. The dry weather that impacted Southern Brazil has cut yield in some areas which is not surprising. The question now is if these will be enough to alter crop estimates for the entire country. Argentina is also experiencing dry conditions, although rains are in the forecast. Even so, some analysts have started to indicate production figures may be adjusted if the dry conditions persist. This has caused a slight build in buying in the markets, especially with both corn and soybeans drifting into oversold territory. The commodity market on a whole has likely over-reacted to the Coronavirus outbreak and is due for a correction. While immediate commodity demand is being affected, long term buyers will still need imparts. This is especially the case for China, who continues to state they will live up to the requirements of the Phase 1 trade agreement. Timing remains an issue with this though as any buying will likely come after the South American harvest. Aside from these fundamental factors, the market is over-extended to the downside on technical charts which is beneficial as well. That said, the market could simply carve out a fresh trading range until the true impact of the Coronavirus is better known.


* Coronavirus continues to spread

* Global cases now top 90,000

* Africa expected to be hit hard by virus

* OPEC to reduce oil output

* SAM weather gaining market attention

* China to reduce some tariffs

* Main beneficiaries will be soybeans and pork

* Eastern US remains too wet

* Still concerns Coronavirus may cause global recession

* Chinese manufacturing index record low

* Markets rebound from oversold, now need fresh buying


* IGC raises world corn production

* 2020 base insurance at $3.88; $4.00 last year

* Ethanol margins near even

* US corn acreage continues to rise

* Dry weather impacting SAM corn production


* Dispute continues over Argentine export taxes

* Exports from Argentina temporarily suspended

* Base insurance at $9.17; was $9.54 a year ago

* Brazil harvest falls behind 5-year average

* Buyers shifting to Brazil


* 2020 world wheat production to rise 2%

* World wheat production a record 769 mmt

* 70% chance of normal rains for Australia this year

* Egypt sets yearly imports at 3.5 mmt

* US not competitive in global market


* CME wants to limit volatility in markets

* Chinese meat demand down, limiting imports

* Pork production down 15-20% in China this year

* Cattle reverse losses on strong cash market

* Cattle slaughter up 54,000 on the year

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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