AgriVisor Morning MarketWatch

Friday, December 03, 2021
It has been one week since the announcement of a new Covid strain and countries would be imposing restrictions to try and stop its spread. This immediately led to sharp declines in almost all markets, including the commodities. The initial reaction to this news was likely overdone, and overexaggerated due to the low volume created by the Thanksgiving holiday. Futures were quick to stabilize, and losses were limited compared to other Covid announcements. Still, the rapid sell-off in the markets showed just how nervous traders are, especially the managed money crowd. We have witnessed an increase in managed money involvement in commodity trade which heightens this potential volatility. As a result, traditional market fundamentals have taken a back seat to technicals and other factors, with simple profit taking and the limiting of potential losses being two main ones. The real question now is if this money flow will resume or if traders will simply wait for further developments before establishing new market positions. The timing of this development will be a factor in this decision as many traders are already starting to shore up positions ahead of month, quarter, and year end.   

* World food values rise for 4th straight month
* World food values +1.2% from Oct to Nov
* Biofuel producing countries alter blend rates
* Technicals playing role in price discovery
* Drought builds in US Plains 
* Conditions now driest in 7 years
* Trade questions SAM conditions 
* Volatility builds in US dollar 
* Dollar is 8% off lows 
* Stats Canada production data today     

* Chinese corn $10.60/bu  
* Argentine exports perking up 
* Many buyers waiting for new crop   
* Global feed grain trade is down   
* Domestic demand likely underestimated   
* Argentine crush is slowing 
* Brazil still making old crop exports  
* Strong dollar encourages selling 
* Rebound expected in Australian Canola crop  
* US demand likely overestimated   

* EU wheat carryout under estimates   
* Stats Canada to forecast production    
* Argentine crop estimates rising    
* Paris milling wheat makes new highs 
* Russian taxes not slowing exports      
* Bird Flu again a market concern    
* Most cases reported in EU   
* 2021 beef sales at 21,600 mt
* 2021 pork sales at 41,400 mt
* China a large buyer of both

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.