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AgriVisor Morning MarketWatch

 
Wednesday, December 01, 2021
Now that the calendar has turned to December, we will see a shift in market attitude. The main one of these is positioning for year end. This is more of a case for farmers who run on a calendar year rather than a fiscal year, but definitely is a factor in price discovery. We also have the Christmas Holiday that trade will position for which brings thin volume and makes futures much easier to manipulate. This can cause exaggerated trade activity from now until we turn the calendar to 2022. We will also start to see some positioning in the market for the December WASDE report that will be released on the 9th. Only commodity demand is updated this month which tends to decrease trade interest in the data. We have seen several surprises from the USDA in reports this year though and cannot rule out anything in this one either. On the global front all interest will be on the approaching South American harvest. Soybean harvest is expected to begin in Brazil by mid-month with exports to follow shortly after. Demand for US soybeans is expected to drop even more when this begins. 

Highlights
* Mostly favorable weather in South America
* Ukraine expected to turn dry on winter crops 
* Ukraine grain exports +18% from last year
* NCGA asks for removal of input tariffs
* Yearly ethanol exports a record $2.9 billion 
* La Nina still building, slower than last year
* US jobless claims lowest since 1969
* US processing margins remain favorable
* New month positioning to develop
* Dec WASDE next Thursday   

Corn
* Average US spot basis -14 cents  
* Basis is 7 cents better than last year 
* Ukraine exports pressure US sales 
* Brazil corn values retreating 
* More old crop selling in Brazil  
 
Soybeans
* Global veg oil corrects
* October crush est 195.6 mbu  
* US meal sales lightest in 3 years  
* US overpriced in global market
* Brazil meal $54.00/mt under US  

Wheat
* Near perfect growing conditions in SAM  
* Argentine crop a record 20.3 mmt  
* Low protein in Australian wheat   
* Buyers pass on high prices
* Egypt reports 5 month wheat supply     
  
Livestock
* Chinese hog herd size questioned    
* Packers focus on Christmas needs  
* US pork exports slowing  
* Lower demand negates low pork production 
* Beef costs impact consumer demand

RISK DISCLAIMER: The risk of loss in trading commodity futures and options is substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. The information contained in this report is believed to be reliable but is not guaranteed to accuracy or completeness by AgriVisor, LLC. This report is provided for informational purposes only and is not furnished for the purpose of, nor intended to be relied upon for specific trading in commodities herein named.  This is not independent research and is provided as a service.  As such, this is considered a solicitation. 
 

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