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E-Visor Reports: Market Watch

 
Tuesday, November 17, 2020
Trade is now starting to focus more on the global production numbers that are being released as large crops of corn and soybeans out of South America will be critical in maintaining adequate commodity reserves. While analysts in South America are holding to large crop expectations, there is little if any room for loss. The most attention is on Brazil where expansion may be needed to make this happen. Sources in Brazil claim the soybean crop will still total 135 million metric tons, even with losses in some regions of the country. If we start to see this number decrease the futures market will react accordingly. The same is true on corn where Brazil is predicting a 105 million metric tons crop. Not only will we need to see large crops in South America this year but in the United States next year to rebuild commodity reserves. Economists claim an additional 10 million acres of US plantings will be needed next year from this year with the most going to soybeans. While this is possible, we need to question where the additional acres will be found. Most likely we will see marginal CRP acres exit the program, and while these may increase plantings, their ability to produce sizable crops is questioned. 

Highlights
* US corn harvest 95%, soybeans 96%
* NOPA crush a record 185.25 mbu
* Trade volume decreasing, volatility building
* Funds add to long positions
* Covid restrictions building
* La Nina continues to build
* La Nina likely until February
* Buyers continue to surface on breaks
* New crop acreage debate increases

Corn
* Higher Brazil exports in November
* Official Chinese import figure remains under others
* Processing margins under pressure
* Gulf basis continues to soften
* EU imports rising
 
Soybeans
* Chinese buying has slowed
* China predicts 95 mmt imports for the year
* US production likely to decrease further
* Brazil ups November export forecast
* China may use reserves to avoid imports 
 
Wheat
* Winter wheat 96% planted
* winter wheat 85% emerged
* Crop rating improves to 46% G/E
* Australia crop at 28 mmt
* China predicts larger crop than USDA estimates
 
Livestock
* Cash cattle lead futures
* Feed cattle $16.00 premium to fat
* Funds add to livestock longs
* Market counting on high holiday demand
* Countries to start testing meat imports for Covid

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.