Market Report 13.07.20

1.2607 £/E1.115  E/$ 1.1309


Strong outperformance by U.S wheat post USDA, was the story Friday, with Chicago wheat settling around 9 cents higher and corn double digits lower. Kansas City finished 4 lower with Mpls flat on the day. Over the week Sep-20 Chicago wheat gained over 40 cents, with corn losing around 6 . A slight improvement in the weather outlook seemed to spur the divergence in price action, with increased precipitation in the very short term at least, causing corn to come under some pressure. Remarks from President Trump that a Phase two deal with China was not a priority did not help and the USDA maintaining corn yields at a record 178.5 bu per acre, in spite of the recent hot/dry spell seemed to disappoint some analysts. In Europe MATIF eased from the 6 week highs seen earlier in the week, whilst London Nov-20 settled nearly a pound lower on the day, but still up over 1% on the week. Black Sea was about $8 higher on the week, with early harvest yields underwhelming. Turning to the report then, there were few real surprises but here are some of the numbers - for wheat, 2020-21 US production came in less than expected at 1824 million bu versus 1877 million bu in June and 1855 million bu average estimate. The world wheat carryout for 2020-21 was 314.8 million tonnes versus 316.1 million tonnes in June and 315.5 million tonnes average estimate. The EU 2020-21 wheat crop was lowered by 1.5 million tonnes to 139.5 million tonnes and the Russian 2020-21 wheat crop was lowered by 500,000 tonnes to 76.5 million tonnes. The 2019-20 corn carryout rose by 145 million bu from the June report to 2.248 billion bu but came in below the average estimate of 2.286 billion bu.The 2020-21 corn carryout fell by 675 million bu from June to 2.648 billion bu versus a 2.728 billion average estimate. The world corn carryout for 2020-21 was cut sharply by 22.9 mmt from June to 315 million tonnes and was well below the average estimate of 325.6 mmt. Now that these reports are behind us, the market will return to trading the weather. Generally, the 8-14 day outlook looks hot and dry for central and southern Plains, alt


 U.S beans lost 6 3/4 to 10 3/4 cents Friday, with meal $4.30 to $5.30 worse off following the July WASDE release. A slight improvement in the weather and comments from President Trump fueling doubts around the current and any future trade arrangements with China, added to the pressure. Looking at the report, the USDA raised 2020 US soybean production by 10 mm bu to 4.135 bn bu versus the average estimate of 4.167 bn bu. As with corn, the USDA did not change the soybean yield leaving it at 49.8 bu per acre, again disappointing some. 2020-21 soybean carryout was raised by 30 mm bu from June to 425 mm bu. Being carried into  stocks from 2019-20 rose by 35 mm bu while 2020-21 crush was raised by 15 mm bu. The world soybean carryout for 2020-21 was lowered by 1.2 mmt from June to 95.1 mmt versus 97.7 mmt average estimate. The 2019-20 Brazil soybean crop estimate was raised by 2 mmt to 126 mmt while the 2020-21 Brazil soybean crop was left unchanged at 131 mmt. The Argentine soybean crop for 2019-20 was lowered by 1 mmt to 50 mmt while the 2020-21 soybean crop was left unchanged at 53.5 mmt. Also released Friday was the COT report. This showed the spec's increased further the long in beans; now at 9.6.mmt, but still some way short of the record long (28-30 mmt).


The dollar index fell to 96.6 against a basket of currencies on Friday, posting a 0.6% fall on a weekly basis, its largest percentage loss in a month. The British pound was little changed at $1.2620 with the euro trading above $1.1300. Hopes of a potential coronavirus vaccine offset concerns about the surge in infections in the US and around the world after Gilead Sciences Inc said that its antiviral drug remdesivir reduced the risk of death by 62%. Second-quarter earnings season gets underway this week, with analysts expecting the worst earnings quarter since Q4 2008. EU leaders will meet to discuss a common recovery plan, while central banks in the Euro Area and Japan will be deciding on interest rates. UK jobs and monthly GDP will also be reported. .