E-Visor Reports: Market Watch

Friday, February 19, 2021
We are starting to see a gradual shift in market focus which is not uncommon at this stage of the marketing year. Up until now the main focus of the market has been old crop demand and the need for rationing of inventory. While this is still very much a factor in the market, we are now starting to see more interest on new crop production as well. For one this puts more emphasis on acres, but also on weather. Given the fact that large crops are needed to not just satisfy current demand but help rebuild inventory any factor that would lower yield will get noticed. We will likely see elevated risk premium in the futures market. It is not out of the question we could see a more willing cash buyer once new crop bushels become available. Basis values will likely remain firmer than normal across the interior market as a result. Export buyers are also monitoring the new crop developments in the United States and will make purchases accordingly. If there is any indication that US production will come up short this year, buyers may be hesitant to make purchases if they do not feel timely shipments will take place.  

* China returns to markets today 
* Ag Outlook forum continues
* Forum predicts net farm income for 2021 at $111.4 billion
* Interior basis remains firm 
* Financial markets focus on Covid relief
* Consumer costs to rise on elevated commodities
* Brazil starting to undercut US in global market
* Record Brazil exports predicts for March/April
* 40% of US crude production offline from weather
* Lower export sales predicted today

* Forum predicts 1.5 bbu carryout this year
* 2021/22 carryout at 1.55 bbu
* Corn yield estimated at 179.5 bpa this year
* Safrinha planting in Brazil only 25% of normal rate
* Privates hold to 105 mmt Brazil crop
* Forum predicts 120 mbu carryout this year
* 2021/22 carryout estimated at 145 mbu
* Soybean yield estimated at 50.8 bpa 
* Crush margins rebound
* Chinese crush margins at 2 year high
* 2020/21 carryout estimated at 836 mbu
* 2021/22 carryout at 698 mbu
* Wheat yield to average 49.1 bpa 
* Trade continues to predict winterkill losses 
* Russia cuts crop 1.5 mmt
* Feb 1st cattle on feed est 101% of year ago
* January placements at 100%
* January marketings light at 94.5%
* Outlook predicts cattle values of $115 this year
* Hog values predicted at $50.50

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