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E-Visor Reports: Market Watch

 
Monday, May 03, 2021
Today brings the first trading day of the month, and with it, some big changes for the futures market. Daily price limits will be updated for corn, soybeans, and wheat starting with today’s session. The new daily price limit on corn will be 40 cents per bushel, with an expanded limit of 60 cents. The new soybean limit is $1.00 per bushel with an expanded limit of $1.50. Wheat futures will have a daily limit of 45 cents that will expand to 67 cents. These increases open the door for even more market volatility and the potential for greater price swings, especially when combined with elevated position limits as well. The fact this is taking place right in front of what is expected to be the most volatile weather markets in the past several years could make things very interesting in commodity futures. Now that the calendar has turned to May, we will also start to see more positioning ahead of the long-awaited monthly WASDE report. This will contain the first official look at new crop balance sheets, which many are expecting to be just as tight as old crop. This is especially the case on soybeans, where minimal carryout is predicted.  

Highlights
* Large advance in planting expected tonight
* Some regions of Corn Belt claim to be done
* US processor margin remain favorable
* US ethanol production remains low
* Ethanol production 8% under pre-Covid levels
* US over-priced in global market
* Russia to lower export taxes
* Food inflation again a global concern
* India Covid numbers sky rocket
* New daily price limits take effect

Corn
* New 40 cent price limit
* Argentine corn 80 cent discount to US
* Corn planting projected at 50%
* 22% of US corn area in drought
* Safras lowers Brazil corn crop 8 mmt
 
Soybeans
* New price limit is $1.00/bu
* Brazil soy is 50 cents under US
* 19% of US production area under drought
* China covering summer needs from Brazil
* Census crush today est 188.4 mbu 
 
Wheat
* New daily price limit is 45 cents 
* Winter wheat rating to stabilize
* Large advance in spring wheat planting
* World demand is routine
* World wheat supply is adequate 
 
Livestock
* Cash cattle trade is light
* Cattle basis widens
* High carcass weights benefit packers
* World pork supply is tightening 
* Technicals pressure livestock futures

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.