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AgriVisor Morning MarketWatch

 
Friday, January 14, 2022
We are at a point where we see a shift in market focus take place. We are starting to see a shift in market attention from this year’s production to what we will see for next year’s plantings. This is common following the January supply and demand report as production numbers will now remain constant for the rest of the marketing year. This starts to put more emphasis on new crop production and this will likely be a year with more attention than most given the high cost of inputs many farmers are facing. The initial thought is this will cause a decline in corn acres from this year to next with some analysts predicting up to 3 million fewer plantings next spring than last. While this is possible, it seems like a high estimate at this time. Many farmers report they applied much of their inputs last fall and avoided the high costs. Others claim they do not want to alter their rotations for one year. What we may see is a decline in corn acres in low production areas, but those may not impact total crop size as much as thought. The answer to these uncertainties will likely not be seen until the March 31st planting intentions report, and possibly beyond.  

Highlights
* Market focus back to SAM weather
* US still pushing China on Phase 1
* Analysts continue to lower SAM crop potential 
* US DDGs support ethanol margins
* DDGs up another $15/mt 
* US interest rates a market concern 
* US processing margins remain firm     
* Brazil commodities start to rally
* Technicals limit buying interest
* Trade closed next Monday

Corn
* Argentine crop estimates lowered
* Arg crop 40% G/E, was 58% last week
* Interior basis is softer 
* Inputs more of a market factor 
* Weekly export sales up 79%
 
Soybeans
* Brazil still selling old crop
* Brazil 95% sold on old crop, normal is 99% 
* New crop Brazil sales 36.5% of crop   
* China wants to increase soy production 40%  
* Weekly sales up 92% 

Wheat
* Chinese buyers taking all auctioned wheat            
* Auction values average $11.57/bu
* China buying large volume of Argentine wheat
* US wheat $6/mt under Russia for spring
* Export bookings totaled 9.7 mbu
  
Livestock
* 2022 beef export sales 9,700 mt
* 2022 pork sales 19,800 mt
* China absent from buying lists 
* Mexico pork demand +33% on the year
* Retail beef up 24% in past year

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