Tuesday February 11, 2020

• USDA report out at noon today 
  • Again ideally for markets to see a rally post report we would want to see decreasing carryout numbers – indicating an increase in demand
  • Average estimates are not indicating we will see major changes
  • Generally trade is quiet the morning before a report 
• Conab (private analyst) increased their expectations for Brazilian production – with USDA expected to follow suit in today’s report 
  • Conabs new estimates see soybean production at 123.25 MMT and corn production at 100.5 MMT 
• Ontario soybean exports continue to lag significantly compared to year ago levels
  • China-U.S. trade deal has decreased the amount of exports from Canada
  • Canadian soybean market will likely function in a way to discourage acres in 2020 through lower prices and encourage demand as we move through the spring and attempt to work through large Ontario stocks 
• Ontario wheat and corn see a slightly better picture – particularly with old crop as the Ontario stocks of both are significantly tighter due to production issues 
• Bloomberg reports that China may end up delaying farm purchases from the U.S. as agreed upon in the phase-one trade deal due to the impact of the coronavirus – however saying they will likely be fulfilled bu the end of 2020 
  • Is this a reflection of the concern of Chinese demand due to the disease or is this a way to deflect purchases of the more expensive American beans and move to South America for purchases