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E-Visor Reports: Market Watch

 
Thursday, November 19, 2020
Losses were posted overnight as rain chances for South America increased. The technical pressure that limited yesterday’s advances also weighed on overnight activity. An underlying factor in today’s trade remains the spread of Covid-19. Several states have now enacted restrictions on non-essential travel and dining. We are also starting to see more schools and events cancelled across the United States. The concern with all of these is what their impact will be on commodity demand. The obvious is that if travel drops off, we will again see energy demand falter as well, and in turn, a reduction in demand for renewable fuels. This comes as ethanol manufacturing was reaching its highest levels since the initial Coronavirus outbreak took place. We are also seeing questions on commodity demand if schools and restaurants close down again. While at-home dining offset some of the losses from initial restrictions, trade is questioning how much of that will continue without a government aid package. If consumers are not comfortable with their finances, spending on food products can be greatly affected, especially when it comes to the meats. In time of economic uncertainty consumers tend to opt for cheaper food products. While the promise of a vaccine for Covid is nearing, until it can be fully accessible, these worries will continue. 

Highlights
* Technical resistance limits advances
* US export loadings at record pace
* Questions arise over long-term energy demand
* Ethanol stocks closing in on last year’s level
* Japan reports better than expected economic growth
* China’s economy improves in October
* Rain chances improve for Brazil
* Analysts maintain normal Brazil yield forecasts
* Soy exports likely to be delayed 2 weeks
* More cases of Bird flu around the globe

Corn
* US corn demand underestimated 
* Buyers locking in option origin purchases
* Gulf basis firming
* Ukraine corn values rally
* Lower exports expected today
 
Soybeans
* China accounts for 2/3 of US demand
* China shopping for premium quality soybeans
* Brazil now 3% ahead of normal
* Soy oil leading complex
* Trade looking for rationing in sales report
 
Wheat
* Total US acres may be up 5-10%
* Russian farmers expand plantings
* Larger acres offset yield losses
* Corn/wheat spread narrows
* Wheat in s tight, sideways pattern
 
Livestock
* 2020 beef exports at 702,000 mt
* Yearly beef exports +2% last year
* 2020 pork sales already above 2019
* Yearly pork sales total 1.6 mmt
* Buyers shift to 2021 buying now

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.