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E-Visor Reports: Market Watch

 
Thursday, June 17, 2021
Country movement has been on the rise and it is staring to generate questions in the market. The immediate reaction is that farm stored inventory may have been larger than thought, and farmers have more stocks to sell. While this may be the case, the fact that futures remain inverted is also a possibility. The current inversion in futures makes it less desirable to hold inventory into deferred months. Thoughts there may be a bearish surprise in the June 30th stocks and acreage reports is further encouraging sales in the spot market. A simple need to generate cash flow following the spring planting season is also a factor for elevated selling. This is especially given the end of federal support payments that were used for cash flow much of last year. Commodity sales are not only elevated in the United States, but in South America as well. The sales being noted the most right now are in Argentine soybeans. Farmers in Argentina have been holding soybeans off the market for much of the harvest season but are now showing concern that values will recede. The same is happening with Brazilian corn, where sales have risen even with lower production estimates.  

Highlights
* Positioning increase for month end reports
* More interest on acres than stocks
* Stocks data may be bearish following WASDE surprises
* June 30th also quarter end
* New crop balance sheets remain bullish
* Futures need to retain risk premium
* US corn/soy ratings fall below 10 year average
* Markets closely monitoring consumer spending
* Experts predict $100.00 crude oil
* Fed admits inflation building 


Corn
* Russia raises crop estimate
* China lowers corn use forecast 
* Basis values weaker
* Loadings falling short of needs
* Argentine production continues to rise
 
Soybeans
* 2021 Chinese imports predicted at 38.2 mmt
* Crush margins negative in China
* Argentina unable to load barges
* Old crop basis weaker, new crop firming
* Oil losses pressure soybeans

Wheat
* Global production estimates rising
* French wheat 80% G/E, was 56% last year
* Black Sea production estimates up 3.6 mmt
* Spring Wheat rating lowest in 10 years
* US harvest remains slow
 
Livestock
* Chinese hog inventory +23.5% in May from 2020
* Soy inventory up 19.3% 
* Sow numbers now 98.7% of pre-ASF
* Cash cattle hold at $120 for 10 weeks
* Cattle slaughter 1% under last year   ​

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.