Morning Comments; Friday, May 15th, 2020
Agrivisor - SETZ - Fri May 15, 6:35AM CDT

Trade now has a better idea of how much damage was done by last weekend’s freeze in some regions of the Corn Belt. For corn, the damage from cold temperatures is expected to be light. This is from the fact most of the corn that was subjected to freezing temperatures had its growing point underground. This insulated it from the cold temperatures. Corn tissue that was above ground and froze will have little impact on the crop or potential yield. The question now is in fields that were froze in a large scale though, as at the present time, insurance values may be a more economical choice than attempting to replant. The real question may be on soybeans, as that crop cannot stand freezing temperatures if exposed to them while above ground. As a result, crop loss is more likely on soybeans than corn. Trade will also start to monitor the approaching final plant dates on corn as farmers will likely opt for insurance rather than try to force a crop in the ground. This same scenario is unfolding on the spring wheat crop where parts of the Plains are at their final dates. The other side of this story is how many acres of these crops are really needed given our current demand forecasts, especially on corn. Corn ending stocks are forecast to hit the highest levels seen since the 1980’s in the United States so some production loss can be easily absorbed. Traders may be hesitant to extend their ownership until this can be better determined. That said, funds continue to hold a record short position in corn for this stage of the year, so any adverse outlook may instigate a short covering rally and give us higher values.

Highlights

* Weather improves for Black Sea, other regions

* World commodity supply is adequate

* House to vote on Covid relief package today

* Ethanol/Export forecast on corn lowest since 2013

* US economic outlook remains uncertain

* Another 2.98 million jobs lost last week

* Unemployment jumped 36.5 million in two months

* Private firms decrease corn plantings, increase soybeans

* Replant talk is increasing

* More talk of prevent plant in some regions

Corn

* Ukraine production up 4% this year

* Corn acres not adjusted in WASDE data

* Some regions of US still have old crop to harvest

* Good production regions in Brazil offset poor ones

* Weekly export sales good at 42.2 mbu

Soybeans

* NOPA crush report today

* US crush values weakest since last October

* Thoughts of elevated soybean acres

* China has booked 730,000 mt soybeans this week

* Last week’s sales at 24.1 mbu

Wheat

* Canada to plant most wheat since 2013

* Canadian wheat acres 2nd highest on record

* US freeze loss was minimal

* Russian officials lower crop estimate 3 mmt

* Ukraine production to decline 11% in 2020

Livestock

* US beef exports just 4,191 mt last week

* Beef sales -20% from previous week, calendar year low

* Weekly pork sales at 11,827 mt last week

* Pork sales -77% from week before, China only buys 6,100 mt

* US only selling cuts of meat not used domestically

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