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E-Visor Reports: Market Watch

 
Tuesday, November 23, 2021
One of the most debated topics in the market remains next year’s prospective plantings. The current price ratio favors corn production over soybeans, but private firms disagree. Some privates believe corn acres will decline considerably next year while soybean and wheat plantings will increase. This is based off the recent rally in input costs, mainly for corn. Fertilizer has more than doubled from a year ago and there are thoughts this will reduce plantings. Current application reports do not support this theory though with many farmers across the Corn Belt applying their normal fall rates. A primary reason for this is the ample amount of cash reserves across a large portion of the Corn Belt given current commodity values and high yields. Most farmers across the United States wish to hold to their acreage rotations rather than make a one year adjustment due to input costs or projected returns. A story that is starting to develop and needs to be closely monitored is the geopolitical escalation between Russia and Ukraine. If any sort of conflict breaks out, many importers will likely place embargos on Russia which would cover ag trade as well. This could easily bring the US elevated wheat demand at a time when ending stocks are already forecast to hit a multi-year low. 

Highlights
* Higher US interest rates likely
* Ag loan demand on the rise
* US to release crude from strategic reserves
* Any market break expected to be short lived
* Little if any country selling taking place
* World grain demand outpacing production
* Dec options expire this Friday
* FND on Dec contracts next Tuesday
* Markets closed this Thursday
* Markets close early on Friday  

Corn
* Harvest at 95% complete
* China may auction corn today
* Brazil corn at an 8 month low
* Ethanol rally supports corn
* Ethanol futures may be over-extended
 
Soybeans
* Harvest at 95% 
* Chinese market rallies
* Basis gradually weakening 
* Basis still 20-60 cents better than average 
* China is 2/3 of US export business 

Wheat
* Winter wheat 96% planted
* Crop is 86% emerged
* Crop rated 44% G/E, -2% 
* Buyers source needs from Black Sea  
* US likely to import milling wheat  
  
Livestock
* Beef in cold storage at 477.06 million pounds  
* Pork in cold storage at 439.6 million pounds 
* Pork belly supply at 11.6 million pounds
* Back-ups reported at US packers
* Hog weights continue to trend higher

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