Morning Comments; Friday, May 22nd, 2020

Over the past several days we have seen reductions to corn acreage estimates for this growing season. These have not received much of a reaction in the market however, as even with decreases, corn acres will still likely be well above last year. Given the average reduction to corn plantings we may still see a crop of 15.5 billion bu which is more than enough to cover projected demand. This size of a corn crop would still leave the United States with nearly 3 billion bu of new crop ending stocks as well, which is far from bullish. Given the fact the world corn inventory is expected to jump considerably from this year to next further removes the need to show concern with a possible reduction to US plantings. The greatest unknown in corn plantings remains in the fringe areas of the Corn Belt where continued rainfall is again slowing planting progress. The other side of this equation is a possible increase in soybean plantings. This potential increase to production may be more easily absorbed in balance sheets. New crop carryout is currently predicted at 405 million bu, and that is with a robust 49.8 bushel per acre yield being forecast. If the acres that analysts are predicting to drop from corn end up being planted to soybeans, it would increase ending stocks to 500 million bu if everything else remains constant. Given these possibilities, it is not out the question we could see adequate plantings and production of both corn and soybeans this year. Of course, we have to consider the demand side of this, and that is where the greatest unknown is. This is especially true on corn and how quickly we see a return to normal ethanol manufacturing volumes.


* US/China trade tensions escalate

* 30/90 days forecasts favorable for production

* Ethanol values up at the gulf

* Concerns over quick build in ethanol production

* Brazil Real shows signs of stabilizing

* Rumors of additional EPA waivers

* Covid-19 payments to limit cash movement

* More market attention on crop conditions than planting

* Corn planting 90%, soybeans 70% by Sunday

Covid Relief sign up begins next Tuesday

* Markets closed Monday for Memorial Day


* Funds comfortable with large short position

* Little planting progress made this week

* Feed demand remains uncertain

* China to begin reserve auctions

* Weekly sales good at 34.8 mbu old crop


* Brazilian soybean basis firms

* Real starts to rebound

* Brazil 80% sold on 19/20 crop, 30% sold on 20/21 crop

* USDA may be over-estimating old crop demand

* Weekly sales high at 44.3 mbu old crop, 17 mbu new crop


* Crop tours finding better yields than USDA

* Tours also finding higher amount of damage

* Russia cuts crop forecast

* USDA underestimates demand

* Cumulative sales already above USDA projections


* COF after the close

* Weekly beef exports mkt year low 4,000 mt

* Weekly pork exports -5,800 mt due to Chinese cancellations

* Pork in cold storage at 614.8 million pounds

* Beef in corn storage at 490 million pounds

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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Karl Setzer Grain Commentary