E-Visor Reports: Market Watch

Friday, November 13, 2020
While it seems early, trade will soon start to shift its attitude into a holiday mindset. In many years this starts just before the Thanksgiving Holiday and lasts through the end of the year. To see reduced trade volume during this time span is not uncommon. This does not necessarily mean a reduction in trade volatility though, and in fact, it tends to increase. We will also start to see positioning for year end over the next several weeks. Funds continue to hold sizable long positions in commodities so to see liquidation would not come as a surprise. One difference this year is the global outlook on commodities, especially in soybeans, where stocks are tightening. Long speculators may be more willing to hold their positions over year end as a result. Trade will continue to monitor South American weather on a daily basis, especially as we approach the harvest season. While planting is still taking place in Brazil, harvest of the initial crops will begin in another few weeks. The real question is if farmers will plant as many double cropped acres if dry conditions persist. To see a scaling back on intended double cropping would not be surprising if conditions persist. 

* US needs an additional 10 million harvested acres next year
* Soybeans will need majority of additional acres
* Rising Covid cases remains a major concern for markets
* US ethanol stocks, now near year ago
* Brazil rains critical next week
* Germination a concern on planted crops
* Officials still not lowering Brazil crops
* Interior basis remains historically tight
* Gulf basis weaker

* US corn loadings +127 mbu year ago
* Large application of fall fertilizer noted
* Active fall tillage tends to favor corn planting
* Minimal losses in China from typhons
* Spot export basis is weak
* Very little crop left to market
* South American production estimates questioned
* Global rationing needed
* US ending stocks tightest since 2013/14
* Average cash value then was $13.00 
* Global wheat supply adequate
* More buyers shift to Australia for needs
* Global wheat feeding on the rise
* EU to increase wheat plantings 9%
* China to elevate wheat plantings as well
* Chinese pork values decline in October
* 1st decline to Chinese pork in 19 months
* Grains rally weighs on feeder markets
* US beef production in 2020 to increase 85 mil pounds
* US pork production in 2020 to decrease 25 million pounds

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.