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E-Visor Reports: Market Watch

 
Tuesday, January 05, 2021
Volatility is starting to build in the markets, not just commodities but all markets, which is causing erratic trade. This is being caused by concerns over political disputes in the United States and a continued rise in Covid cases around the world. Thoughts are this could cause additional restrictions on demand, even with vaccinations taking place. The primary driving fundamental factors of the market remain the need for rationing and South American weather. Price rationing has been more difficult this year as the United States is the only source for product at this time and buyers are willing to pay elevated values for coverage. This is especially the case on soybeans. We have seen some passing on corn in favor of alternative grains, mainly for feed. Even with this, sales of corn remain strong and will until other countries begin their harvests. Weather remains a factor in South America as well as several private analysts have started to back off on crop estimates, especially in Argentina. This has led Argentina to suspend its old crop corn sales, even though sources in the country claim to have more than enough old crop corn on hand. The question on weather now is if conditions will impact double cropping, primarily the much anticipated Safrinha crop in Brazil. 

Highlights
* Need for rationing continues
* Exports slow to resume in Argentina
* Ukraine grain export values at 6-year high
* US ethanol margins continue to erode
* China to expand production
* Mexico to phase in GMO corn ban
* Global inflation supports commodity values
* High commodity values impacting developing countries
* Reduction to yearly ethanol corn demand not expected
* US dollar continues to fade 


Corn
* 431.7 mbu corn for ethanol in November 
* Brazil ups corn export forecast
* Total SAM exports expected to decline
* China buying large volumes of Brazil corn
* Argentine yields expected to decline 10% 
 
Soybeans
* November crush demand 191 mbu
* Cumulative crush underestimated
* Soybeans supported by higher alternative markets
* Soy oil at 4 year high
* Chinese meal demand record high
 
Wheat
* Wheat loadings starting to slow
* Exports expected to rebound late winter
* Seasonals support wheat futures
* Black Sea sellers are quiet
* Production hurt in South America
 
Livestock
* Packers starting to push bids
* High feed costs hurt producer margins
* Cash hog bids under pressure
* Slaughter numbers slowing
* China bans more Brazilian pork

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.