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E-Visor Reports: Market Watch

 
Monday, December 21, 2020
Trade will be shortened this week due to the Christmas Holiday. The markets will close early on Thursday the 24th at 12:05 PM CT. Trade will remain closed until Sunday night at 7:00PM CT. Trade will again be closed the following Friday for New Years. It is not uncommon to see traders exit the market now and remain absent until early January as a result. To see traders remain absent until the January WASDE report and quarterly stocks will be released this year would not be a surprise given the lack of interest in the market. It is not uncommon to see elevated market volatility at this time as thin trade makes futures easier to manipulate. We may see elevated volatility in the cash market over the next several weeks as well. Grain terminals across the US report having a record amount of deferred income that will be taken after the 1st of the year. This will deter any fresh sales of commodities and likely cause buyers to push for coverage. The extent of incentives being paid will vary considerably, especially if we do not see processing margins improve. This is especially the case for the ethanol industry. More interest may be placed on the outside markets today as even though the Covid stimulus package has passed, sharp losses are being posted in equities and energy values while the US dollar rallies. 

Highlights
* Equity markets post sharp losses
* US dollar rallies overnight
* Congress passes $900 billion stimulus package
* Federal Reserve shows optimism on US economy
* Livestock producers brace for higher feed costs
* Chinese commodity inventory is building
* US gasoline demand -13% from last year
* Buyers have surfaced on breaks
* Concerns over new Covid strain found in UK
* Trade will be shortened this week

Corn
* EU corn imports -23% from last year
* Trade starting to question Safrinha crop
* US has room for elevated demand
* Chinese corn values under pressure
* Ukraine cuts export forecast 6 mmt
 
Soybeans
* Brazil crop estimates remain large
* Demand needs to be rationed
* Argentina fails to supply needs
* Rumors of Argentine sales shifting to US
* Chinese soy values -7% last week
 
Wheat
* EU exports at 11.6 mmt
* EU exports -17% from year ago
* Lower EU exports from 12% crop reduction
* Ukraine weather more favorable for winter crops
* Argentine harvest underway
 
Livestock
* Dec 1st Cattle on feed 100% at 12.04 million head
* Nov placements -9% at 1.9 million
* Nov marketings -2% at 1.78 million
* Cash trade light ahead of holidays
* Wholesale values are down

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.