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AgriVisor Morning MarketWatch

 
Wednesday, November 25, 2020
Futures have started to consolidate ahead of the Thanksgiving holiday. While soybean values have continued to rally in recent weeks, much of the appreciation we have seen in values has been on the nearby contracts and not as much on the deferred contracts. In fact in recent session we have seen gains of nearly twenty cents on the spot contract while the new crop bids for next year have struggled to make it into positive territory. This is a good indication that soybean demand is driving the current rally. The debate in the market now is if new crop soybeans are going to start to rally to encourage more plantings. At the present time the price ratio between November 21 soybean futures and December 21 corn futures is 2.55:1. This means it takes 2.55 bushel of corn to equal the value of one bushel of corn and is not conducive to the increased planting of one crop or the other. If the soy complex needs additional acres this spread will need to widen to 2.7:1 or greater to do so. Over the next few weeks we will start to see farmers across the United States locking in their new crop inputs and this price spread will become more of a topic. 

Highlights
* Parts of South America driest in 40 years
* Brazil only seeing 35% of normal rainfall
* Speculative funds not showing fresh buying interest
* Biofuel industry looking at new administration for elevated usage
* Promise shown on new Covid vaccines
* US dollar continues to fall
* More reports of China washing out of soybean bookings
* Ethanol stocks expected to rise in weekly report
* Markets closed tomorrow
* Trade resumes Friday morning at 8:30 AM CT

Corn
* Chinese yearly corn purchases at 7.82 mmt
* China accounts for 31% of US sales
* China, Mexico, and Japan are 78% of demand
* Poultry demand is down
* US corn sales to date a record
 
Soybeans
* China reportedly washes out of more purchases
* Purchases likely shifted to Brazil
* US sales already 85% of yearly estimate
* Products reach overbought levels
* China accounts for 69% of US demand
 
Wheat
* Buyers showing more restraint in purchases
* Global expansion to continue
* Favorable weather continues in Australia
* La Nina keeps drought in Southern US
* Russia more likely to limit exports
 
Livestock
* Record cattle on feed in US
* Consumer demand expected to remain high
* No cash cattle trade this week
* US hog slaughter is slowing
* Pork values under pressure

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. 
 

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