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AgriVisor Morning MarketWatch

 
Thursday, October 21, 2021
There are two vast differences in opinions forming on current stocks to use figures on grains and oilseeds. Domestically we have started to see stocks to use increase on corn and soybeans in recent months. These are now projected at 10.1% on corn and 7.3% on soybeans for the end of the 2021/22 marketing year. These are both right at levels where rationing would be considered but not necessarily needed. This is a considerable change in the mindset of the market from just a few months ago when the market was worried over the possibility of depleting domestic reserves, especially on soybeans. As a result, we have seen much less urgency in the market, and less buying interest from the speculative crowd. We have seen the same change in global figures, although these numbers are not as negative. This is more of a case on corn where even with an 83 million metric ton increase in production from last year, our reserves at the end of the year are only forecast to increase 12 million metric tons. In the world soy complex we are expected to see a 5.4 million metric ton rise in stocks, even with production climbing 20 million metric tons. These figures show how important it is for large global crops every year. 

Highlights
* Chinese buyers focus on South America
* Several Chinese processors remain offline 
* Global energy shortages an issue
* World inflation continues to build
* Covid continues to impact manufacturing 
* Brazil planting pace 2nd highest on record
* November options expire tomorrow
* This likely last big week for harvest
* Weekly ethanol production 3rd highest on record
* US ethanol stocks rising with production

Corn
* US becoming favored source for needs 
* Ethanol demand is rising 
* Ukraine selling to decline  
* Chinese corn cheaper than wheat
* Active Argentine planting reported
 
Soybeans
* China to auction soybeans today 
* ECB basis 30c better than average
* WCB basis 40 cents above average 
* US crush near full capacity
* Few delays to SAM planting 

Wheat
* Exporters try to ration supplies
* US wheat most affordable globally 
* Russian taxes continue to rise
* US has little unshipped wheat sold
* EU exports +45% in past three months

Livestock
* Chinese pork production +43% last quarter
* China pork production in 3rd quarter a 3-year high
* US hog weights rising  
* Average US hog weight +1 pound from average
* US slaughter slowed from Covid guidelines 

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