E-Visor Reports: Market Watch

Thursday, December 03, 2020
Commodity values reversed overnight with grains under pressure and soybeans higher. Soybeans have been under pressure recently from improved weather conditions in South America and technicals. Rumors circulated through the market late yesterday that China was showing interest in US commodities, including soybeans, which offered overnight support. We are now one week away from the December WASDE report. Typically the December release gets little attention but given the tight carryout on US soybeans and production issues in South America, the report will likely receive more interest than in most years. On the domestic side all attention will be on soybeans to see if the USDA is willing to reduce ending stocks estimates any further than they already have. We are approaching a pipeline minimum and to see any reduction from what is currently forecast is unlikely, but not out of the question. Trade is also focusing on South American production. We have seen reductions to the yield estimates in this region from drought, but planting increases may offset them, especially in Brazil. This is the primary reason we are seeing wide production ranges on Brazil’s crops. We need to remember that demand will also be updated in the WASDE reports, and to see an increase in soybean use and a decrease in corn would not come as a shock. 

* Country movement remains very light
* No changes expected to Chinese trade regulations for now
* Net farm income to increase 23% in 2020 from 2019
* US gasoline demand down for 3rd week
* US ethanol stocks up for 5th week
* La Nina expected to last through January
* Timing of SAM rains is beneficial
* Trade wants verification of Chinese buying
* No vessels lined up for Brazil soybeans 
* Privates continue to predict larger global production than USDA

* China to increase import certificates
* US corn commitments +162% from year ago
* Export sales pace 13% ahead of average
* Loadings are 3% under average
* Average US corn basis is -14 March
* Global veg oil demand is strong
* US sales are slowing
* Yearly sales 27% above average
* Drought has slowed Argentine planting
* Brazil out of exportable soybeans
* Yearly sales at an equal pace
* Loadings -1% from average
* China sees little interest in auction interest
* Auction value in China at $9.70
* Rumors of Chinese interest in US offers 
* Feeder cattle continue to rally
* Funds extend long cattle position
* Pork cut outs under pressure
* China may scale back purchases
* Thin cash trade this week

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