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E-Visor Reports: Market Watch

 
Monday, January 04, 2021
Today begins the first full trading day of the new calendar year. This is also the first full week of trade in the past two weeks which may mean a heavier volume of activity for the markets. New month and year positioning will likely be key factors in today’s session. Corn and soybeans finished 2020 with overbought conditions, although we did see profit taking develop on weak longs. The question now is if these will be re-established now. Now that we are in the new year trade will closely be watching farmer attitude to see if movement increases. Very little movement has taken place in recent weeks as farmers have generated enough income off subsidy payments and sales at harvest to limit selling since. While many farmers still have deferred income to receive, we may see more selling now to take advantage of immediate ship incentives. We will also soon start to see elevated positioning ahead of the January WASDE report. Several of the factors that drove futures last week will again be factors this week, and likely until the WASDE data is released. Trade will be closely watching the official crush numbers for November today where a monthly record 192 million bu of soybean usage is expected. 

Highlights
* Funds remain buyers in soy complex
* Country movement remains minimal
* Light deliveries against Jan contracts
* Abandonment likely in Argentina
* Exports will resume out of Argentina this week
* US dollar under heavy pressure
* Farmers willing to pay storage rather than sell
* Covid vaccine rates slower than expected
* High grain costs impacting domestic demand
* Market positioning to increase ahead of WASDE 


Corn
* Spot corn +24.8% in 2020 
* Analysts lower argentine crop estimates
* Funds were buyers into year end
* US remains main global corn supplier
* China corn values continue to rally
 
Soybeans
* Spot corn +24.8% in 2020
* Analysts lower Argentine crop 1 mmt
* Funds were sellers into year end
* Rationing attempts not successful
* Nov crush estimated at 192 mbu
 
Wheat
* Front month futures +14.6% in 2020
* China only selling 12% of auction offers
* SAM millers seeing disruptions from Arg delays
* Global wheat planting is rising
* US competitive in global market
 
Livestock
* Slaughter down from weather delays
* Feed costs weigh on feeder cattle
* US per capita beef demand expected to rise
* Thoughts are beef consumption will be up 14.6#
* Improving economic outlook favors beef demand

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.