AgriVisor Morning MarketWatch

Thursday, October 01, 2020
There is little doubt we will continue to see market reaction to the quarterly stocks numbers in today’s session. While declines were expected to inventory from a year ago, the reductions were much greater than expected and gave us yesterday’s rally. This was especially the case for soybeans where stocks were down a large 386 million bu from a year ago. We also had support from the global weather front with more interest on the Black Sea where winter wheat plantings are being impacted by drought. As stated, we will now see attention shift back to harvest activity and reports from across the Corn Belt. Not only will these factors impact commodity futures, but basis as well. This is only expected to increase as harvest advances over the next several weeks. We will also start to see more interest placed on South American weather as Brazil’s soybean planting season gets underway. Rains have moved through Brazil recently, but more is needed to replenish the dry soils from last year. Soybean seeding has been sluggish as farmers wait for rains to develop. One question in the market now is if buyers will be as eager to secure bushels given yesterday’s rally in futures. 

* New month buying takes place
* Funds holding largest long in Ag products since 2018
* Majority of fund activity is in soybeans and hogs
* Market again focusing on global weather
* More interest on Russian drought
* US GDP -31.4% in 2nd quarter
* Ethanol production down for 3rd straight week
* Flash sales taking strength away from weekly numbers
* China remains top destination of US exports
* Markets starting to position for Presidential election

* Quarterly stocks 1.995 bbu
* Stocks -225 mbu from last year
* Better yield reports coming in
* Hedge pressure limited so far
* EU lowers production outlook
* Quarterly stocks 523 mbu
* Sep 1st stocks -386 mbu from year ago
* Heavy farm gate sales
* Gulf basis starting to soften
* Rains improve soybean quality 
* Quarterly stocks 2.16 bbu
* Stocks -186 mbu from year ago
* All-wheat production for 2020 at 1.826 bbu
* EU production holds steady
* Ukraine wheat values on the rise
* No cash trade this week
* Feeder interest buying is light 
* Chinese pork demand questioned
* Pork cut-out value to start trading Nov 9th 
* Consumers again opting for cheaper cuts of meat

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.