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E-Visor Reports: Market Watch

 
Wednesday, October 20, 2021
Country movement of newly harvested corn and soybeans has been up in the past few weeks, but overall deliveries are not as high as in most years. Reports from interior terminals indicate that most of these deliveries are forward contracted bushels. Farmers across the Corn Belt are reporting ample storage space to tuck away this year’s crops and showing no urgency in extending sales coverage at this time, especially with futures retreating in recent sessions. More movement has taken place in regions with lower storage space, but even then, movement is minimal compared to production reports. The question in the cash market now is if farmers will continue to hold this inventory and when the next flush of stored inventory will take place. Normally we see movement at year end as cash positions are balanced. Historically we also see elevated movement after the 1st of the year when cash flow is needed for new crop expenses. Many commodity buyers report high volumes of deferred income from last year though and this may be used for expenses rather than making new sales. The possibility of this is keeping basis values firm, even with harvest and high yield reports.  

Highlights
* Favorable rains continue in Brazil
* Argentina turning dry 
* Brazil firms raise export forecasts 
* La Nina to last through February
* US tractor sales +11% from last year
* Combine sales +18% on the year
* US DDG values weaken
* US ethanol most affordable in global market
* Brazil ethanol -15 cents to US 
* Another favorable weekly ethanol report expected

Corn
* Chinese corn at $10.00/bu 
* Rally may push buyers to US 
* US corn acres expected to decline  
* Farmers continue to hold corn
* Export sales remain above last year
 
Soybeans
* Quality impacting importer choices 
* Most concern on Chinese demand
* US crush margins near $2.00 
* Farmers continue to make sales
* China booking all new crop from Brazil 

Wheat
* China raises loan rates on wheat
* Rains slow US plantings 
* China to auction 1 mmt from reserves today
* Russian exports -1.6% this year
* Buyers starting to shop US offers

Livestock
* US beef exports +17% from last year
* Yearly beef exports at 720,000 mt
* Yearly pork exports at 1.6 mmt  
* Pork exports -9.4% from last year
* US cash trade remains thin

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.