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AgriVisor Morning MarketWatch

 
Thursday, October 14, 2021
Now that we are past the monthly WASDE report, trade will be waiting for its next fresh round of fundamental information. Given the time of the marketing year we are at this is unlikely to come until the next set of supply and demand data that will be released in November. Until then trade will continue to monitor the US harvest activity and yield reports. We will also see more attention on South American weather and growing conditions. So far conditions in South America have been near perfect, especially in Brazil. Heavy rains have fallen in Brazil recently creating the best soil conditions in the past several years. This is giving the crops a good start to the growing season, something they did not have last year. This is already generating ideas we could see elevated production in Brazil this year. It is not out of the question farmers in Brazil could see additional acres as well, especially with favorable returns. The question in South America is the same as it is in the United States though and that is input availability. Fertilizer use is expected to increase 8% in Brazil this year that may only push yields higher. It is early in the South American growing season though, and plenty of time for issues to develop such as they did last year.  

Highlights
* US inflation continues to rise
* Consumer prices in Sep +5.4% from 2020
* Energy costs up 1.3%, food +0.9% 
* US ethanol margins near 50c/gallon
* Draft restrictions remain on US rivers
* Covid closures limit global trade
* All global trade reporting issues
* Currency rates promote SAM sales
* US farmland values rally
* Another favorable weekly ethanol report expected

Corn
* Interior basis firming
* Futures starting to push for acres
* Mexico accounts for 55% of US demand  
* US corn cheapest in global market
* Ethanol margins support processing
 
Soybeans
* Export basis firming
* Canola futures offering complex support
* Canadian canola reported as high in quality
* YTD exports a 6-year low
* Brazil projects higher exports

Wheat
* Milling quality values rally
* EU planting is underway
* EU exports +60% from last year
* Importers pass on US offers
* High Russian taxes support global market

Livestock
* Cash cattle range from $121 to $124
* High feed costs weigh on feeders
* Livestock liquidation has slowed
* Yearly cattle slaughter +3.3% 
* YTD hog slaughter -1%

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