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AgriVisor Morning MarketWatch

 
Monday, October 04, 2021
Now that the quarterly stocks data is well behind us and we are past month and quarter end the focus of the market will shift. For one we will start to see more attention on possible changes to balance sheets in the October WASDE report. This report will incorporate the September stocks numbers which will alter new crop carryin. Trade is also starting to think we may see steady or even higher yield estimates given the harvest reports that have started to come in. While some regions of the Corn Belt have reported lower than expected yields, it seems the ones reporting higher production are starting to outnumber the ones with poor crops. This is especially the case on corn. Soybean yields are holding close to the current USDA projection. There is still a large amount of harvest ahead of us though and plenty of time for total production estimates to change. We are also going to start seeing more emphasis on the South American planting season and weather now that the calendar has turned to October. Now is when the rainy season begins in South America and heavy precipitation will be needed to replenish depleted soil moisture. Several regions of Brazil and Argentina have seen rainfall in recent weeks but much more will be needed.  

Highlights
* Low natural gas supplies a concern
* US dollar remains volatile
* Big jump in harvest expected this week
* Harvest hedge pressure building
* Large variability continues in yields
* US farm storage expected to fill quickly 
* China on holiday this week
* WCB bids stronger than ECB
* US gasoline demand rising, up 3% from 2019
* Trade to start positioning for Oct WASDE 

Corn
* August ethanol use 417 mbu
* Analysts question US yields
* Quality remains a concern 
* Stalk quality pushing corn harvest
* Cost of production becoming a factor
 
Soybeans
* August US crush 168 mbu
* Chinese crush -9.4% in September
* Declines expected in October crush
* Rains push plantings in SAM  
* Brazil soy planting 2x year ago

Wheat
* Russian exports -22% this year
* Ukraine crop larger than expected 
* 60% of Ukraine crop milling quality
* US interior basis weaker
* Currency drives wheat values
 
Livestock
* Argentina to lift beef export limitations today
* China the buyer of 75% of Argentine exports
* Brazil pork exports est at 1.25 million head in 2022
* Brazil pork exports to increase 13% 
* Consumers pushing back on high meat costs   

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