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AgriVisor Morning MarketWatch

 
Tuesday, October 26, 2021
One of the dominant factors in current price discovery is demand. For the past several weeks we have heard concerns over the slow demand for US commodities. This has mostly been on soybeans where sales trail last year by a considerable volume. Wheat sales also trail last year. Corn sales have been better, but this is mostly from an early surge in Chinese bookings which have been nonexistent in recent weeks. The main reason we are not seeing active export sales is competition from other sources in the global market, mainly Brazil on soybeans and Ukraine on corn. These two suppliers are expected to exhaust their exportable inventories in the very near future, leaving the US as the primary export source in the global market. This may actually favor corn demand as it will be a longer period of time before another crop is available for import needs than on soybeans, which will likely be coming out of South America in January. Corn exports could easily last into the spring months, possibly until April. This is the primary reason some analysts are showing less concern over the slow pace we have seen to start the marketing year. 

Highlights
* Argentina turning dry
* Weather not impacting Argentine planting pace
* US GDP expected to shrink
* Urea values +26% this month
* UAN +16%, NH3 +15% 
* Brazil farmers also struggle to get inputs
* Logistics continue to restrict US exports
* Ethanol, crush margins remain strong
* US harvest slowed by rains
* FND on Nov contracts is Friday

Corn
* Harvest at 66%, average is 53%  
* Fertilizer values a global issue 
* Cost per acre could increase 32% this year  
* Elevated Brazilian plantings expected
* Feed demand questioned 
 
Soybeans
* Harvest at 73%, normal is 70% 
* US yield estimates rising
* SAM meal offers under US 
* Canola posts new contract highs
* Palm Oil drives soy futures

Wheat
* Winter wheat planted at 80% is average
* Emergence at 55%, normal being 59% 
* Crop rated 46% G/E, lower than expected
* Ukraine raises export forecast 
* US drought worries provide support

Livestock
* Herd liquidation continues in US 
* US dairy herd -25,000 in Sep 
* Export demand remains light
* Sep cattle slaughter -1% from August 
* Sep beef production 98% of last year

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