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.  

* 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

* 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
* 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
* 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
* 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

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