E-Visor Reports: Market Watch

Tuesday, December 29, 2020
All interest today will likely fall on the labor talks in Argentina as the government will now become involved. Thoughts are this will bring an end to the dispute which is pressuring soybeans. More analysts are releasing new crop balance sheet estimates with mixed numbers. Few changes are forecast for corn balance sheets which will keep the stocks to use on the grain around 12%. This is considered an adequate volume for ending stocks and not a level that would warrant price rationing. The same is true on wheat where the stocks to use to expected to hold near 40%. The outlook for the soy complex is more of a concern for trade. Even with soybean acres expected to increase a large 6 million this year soybean balance sheets are likely to remain no greater than their current 3.9%. In fact, nearly all analysts expect ending stocks to tighten next year even with elevated production as demand continues to rise. Some scenarios have new crop ending stocks on soybean at a minimal 50 million bu which is unrealistic on today’s market environment. Any indication that actual ending stocks will get this low and we will see buying interest in new crop months like we have seen in the spot market.  

* Labor talks to continue in Argentina
* 170 vessels waiting to load
* US stimulus payments may increase
* Heat to build in South America
* China’s sorghum imports this year at 4.27 mmt
* China sorghum imports +437% from year ago
* China to lower tariffs on 883 products on January 1st 
* Holiday travel the highest since pandemic started
* Two weeks from WASDE/Quarterly stocks
* Year end positioning builds

* China continues to auction corn reserves 
* Auction values rising, demand not slowing
* US ethanol margins deep in negative territory
* Brazil 1st crop potential declining 
* Unshipped US sales a huge 1.16 bbu
* Oilseed market needs rationing
* Rationing is main reason for export taxes
* Soy oil at highest value in 6 years
* Dec 1st soybean stocks tightest in 5 years 
* US soy sales at 90% of yearly estimates
* Labor issues limit Argentine exports as well
* Rains forecast for US Plains 
* Wheat vessels also in Argentine line up
* Ample global supplies tempers production issues
* Brazil millers report low reserves
* Technicals offer support
* Packers now looking for post-holiday coverage
* Boxed beef values mixed
* Cattle packer margins lowest since March 
* Packers margins still holding at $220/head

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