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AgriVisor Morning MarketWatch

 
Thursday, January 21, 2021
Commodity values rebounded overnight, signaling a reprieve to the fund liquidation that has been taking place. The Us dollar weakened overnight which was also beneficial for commodities. The market still needs to ration old crop inventory, specifically soybeans, which is an underlying source of support we will likely have for the next several months, and possibly well into the next marketing year. The new crop acreage debate in picking up as we approach the spring planting season. This has caused new crop corn and soybean values to start working higher in an attempt to sway acres from one crop to another, with soybeans needing to secure the most. This is a topic that will intensify as we start to see planting take place, with many farmers in southern regions of the US claiming they will get in the fields as soon as possible this year. Many are claiming they will jump their insurance dates if planting conditions are favorable. This is because many believe there will be a considerable spread between old and new crop futures and cash bids prior to harvest and want to capture this if possible. While this may help buffer the spread between crop years and commodity supplies it is unlikely to provide a large volume of bushels.  

Highlights
* End user pricing provides support
* Domestic processing margins shrink
* Firms increase Brazilian yield estimates
* President Biden expected to maintain trade regulations
* Most interest is on China and Phase 1
* Managed money position has been trimmed
* Covid 19 lockdowns are increasing
* Political tensions with Russia building
* La Nina may be gone by end of winter
* Heavier SAM sales being made


Corn
* Uncertainty over future ethanol demand 
* Argentina may increase export tax by 3%
* Corn export tax would total 15%
* Safras raises corn crop estimate
* Global corn supply to shrink
 
Soybeans
* Argentina meal exports -18.5% in 2020
* Chinese crush margins improve
* Analysts keep raising price forecasts
* All oilseed contracts rally
* Early Brazil yields from 60-65 bpa
 
Wheat
* US may see fewer spring wheat acres
* Buyers push for Russian wheat ahead of tax changes 
* Global stockpiling increases
* Dollar volatility impacting wheat futures
* Managed money flow in wheat builds
 
Livestock
* Cattle slaughter falls behind year ago
* Yearly hog slaughter nearly unchanged  
* Weaker feed grains benefit feeder markets
* Still seeing hesitation on placements
* Cash markets mostly untested

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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