E-Visor Reports: Market Watch

Monday, December 14, 2020
Today’s trade starts the last full week of activity for the year. As a result we may easily see elevated trade activity as the week progresses. This will likely carry over into the start of next week as it is not uncommon to see positions shored up early and then traders remain absent from the market until the new year. The reaction to last week’s updated supply and numbers is now wearing off. The most interest remains on the lack of an increase to soybean exports. This gives trade the indication that either rationing will limit future sales, or the USDA expects to see cancellations to exiting sales. Trade is also monitoring the Chinese wheat feeding increase and how it may impact corn demand. Trade is now taking these numbers and trying to predict what we will see in the January release. Not only will demand once again be updated in January but we will see the final production numbers for last year’s crops. While it seems early, before long we will start to see estimates released for this report. Given the fact that harvest was in its final stages in November when last updated we may not see significant changes in the January release. 

* Low water levels becoming a concern in US
* Water issues could cause logistic issues for exports
* Farmers unwilling to make cash sales
* 39% of farm income in 2020 was from subsidies
* Economists predict smaller farm payments in 2021
* Bird flu continues to spread
* More countries concerned with food security
* Fund buying expected in early 2021
* Last full week of trade for the year
* Market now focused on year end positioning

* Average US cash basis -20H
* Average new crop basis is -38
* Corn futures not pushing for acres
* Brazil exports are down sharply
* Toxin concerns in ECB build
* China booking fall soybeans from Brazil
* US crush margins remain strong
* Brazil December exports minimal
* Brazil imports record sized 
* Brazil 2021 crop 65% sold
* 40% of winter wheat in drought conditions
* US wheat basis under pressure
* US wheat becoming competitive in world market
* Global production rising
* Wheat remains a buyer’s market
* US pork supply to tighten 4% this year
* Weak cash cattle pressure futures 
* Import market shift from old to new year
* China to launch hog futures
* China bans meat from Brazil packers due to Covid concerns

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.