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AgriVisor Morning MarketWatch

 
Monday, October 18, 2021
We are now at a stage in the marketing year where several factors are being monitored for price discovery and this can create elevated volatility. The most predominant of these is the US harvest and yield reports. Even though we are now close to halfway through the harvest season we are still getting no clear indication of what final yields may be. It appears as though these will be better than initially suspected on both corn and soybeans, but we are still hearing high variability. Trade is also monitoring the developments with the South American crops. Planting and growing conditions in Brazil remain some of the best in recent history and are generating ideas of large crops in that country. The most interest in this is falling on corn following last year’s drought that devastated production. We are seeing improved conditions in Argentina as well which also suffered from production losses a year ago. In addition to these, trade continues to monitor our demand which has been less than ideal over recent weeks. This is especially the case on soybeans where we are still seeing competition from South America in the global market. The macro markets are also impacting commodity trade. While the combination of these influences is creating volatile trade, it is also providing opportunity for cash sales.  

Highlights
* Global balance sheets still tight
* Trade still monitoring La Nina 
* Global inflation continues 
* Higher food costs most concerning 
* World logistics remain an issue
* Interior market pushing for deliveries
* Fam sales limited to excess bushels
* Barge freight rates soften
* Trucking costs rise
* Harvest to advance this week

Corn
* Record global corn trade expected this year
* US stocks to use may be too high
* Brazil crop now 46% planted  
* Quality worries have faded
* Yearly exports +4.2% 
 
Soybeans
* US soybeans cheapest in global market
* NOPA crush for Sep at 153.8 mbu
* Soybeans continue to follow Palm futures
* Chinese imports remain slow
* Yearly exports -39% 

Wheat
* Wheat over-valued as feed grain
* US wheat carryout tightest in 8 years
* Carryout under 600 mbu only 2nd time in 16 years
* US competitive in global market
* Export sales -20.4% 

Livestock
* Consumer demand is shifting
* Boxed beef continues to recede
* Negative margins on feeder cattle 
* Slaughter weights remain high 
* Packers forced to push for coverage

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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