Morning Comments; Thursday, May 14th, 2020
Agrivisor - SETZ - Thu May 14, 6:34AM CDT

Now that we are past the long-awaited May WASDE report, market attention will likely shift towards actual field conditions from across the Corn Belt. Planting is now it its later stages on corn, but this is when the most difficulties can take place. This is from the fact that the majority of acres left to be seeded to corn are in the fringe states where soil conditions have been the least favorable. As it has been, the area receiving the most attention is the Upper Plains, mainly North Dakota. Many farmers in the state have indicated they will take prevent plant insurance if conditions do not allow for timely planting. This could easily allow for additional changes to prospective plantings. These changes will be made at the end of June, which trade is already looking forward to. Historically the end of June acreage revisions has had a significant impact on markets. This is also when the quarterly stocks data is released, and the combination of these numbers can influence market movement into the end of the old crop marketing year. This does not mean the June supply and demand report will not have an influence on commodity futures. From a day to day market outlook, we will continue to focus on export interest and weather outlooks. The United States is expected to become more price competitive with South America on soybeans in the next several weeks which will elevate our sales. The US is already the lowest priced on corn in the global market which has generated several flash sales in recent weeks. While this has been a major source of support for corn values, so has the continued deterioration of the Safrinha crop in Brazil.

Highlights

* US ethanol production up 19,000 bbl/day

* US ethanol stocks continue to decline

* China reported to have issued more import waivers

* President Trump objects to investing in Chinese funds

* New Covid-19 subsidy package to be voted on tomorrow

* New package contains $16.5 million for Ag

* US farm bankruptcies up 23% from March 19 to March 20

* Record production in Brazil again next year

* More reports of corn acres shifting to soybeans

* Additional US states open back up

Corn

* Japan/Mexico account for 38% of US export demand

* DDG values starting to decline

* Crude recovery benefits US ethanol market

* China to increase corn imports 1 mmt this year

* Fund short position remains large

Soybeans

* Brazil currency equates to $20.00 soybeans

* Canadian canola stocks -12.3% from year ago

* China to increase soybeans imports 2.6 mmt

* US/Chinese trade remains questionable

* Export basis starting to firm

Wheat

* Wheat exports remain 3% ahead of last year

* Trade showing little concern with freeze loss

* Spring wheat now at final plant date in some areas

* Black Sea/EU remain dry

* EU exports still up 61% since July

Livestock

* Cattle slaughter up 29,000 on the week

* Hog slaughter up 111,000 on the week

* China to auction 10,000 mt pork from reserves

* More US packers back on-line

* Cut out values start to soften

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