AgriVisor Morning MarketWatch

Friday, November 05, 2021
Positioning is starting to increase in the marketplace ahead of next Tuesday’s WASDE report. For the most part trade is expecting to see higher yields than what was released in October. This is especially the case on soybeans where some models are predicting a 2 bushel per acre increase. The greatest changes may be to demand where trade is predicting mixed numbers. Soybean sales have been well below expectations in recent weeks and there are now thoughts yearly demand is overestimated. For corn the opposite is true with thoughts we will see higher usage. This is not just for exports, but domestically as well. Aside from positioning for this report, more interest is falling on South American weather. Widespread rains have been reported in South America recently with some regions seeing rainfall 300% to 400% of normal. This has greatly alleviated dry soils worries, and benefitted crops, particularly in Argentina. The Argentine corn crop is currently rated at 73% Good/Excellent compared to just 36% a year ago. While there are several models that indicate a string La Nina is going to build in the next few weeks, these rains and soil moisture will help defend against production loss. The real question with the La Nina is how long it will last.  

* World food values highest since July 2011
* October food values 31% higher than last year
* Chinese economy struggling with Covid
* China unlikely to meet Phase 1 objective
* Global supply chain issues may last for years
* Argentine exports record volumes in October
* Brazil planting remains record fast
* No major disruptions from Brazil transit strike
* Ocean freight is dropping 
* WASDE data next Tuesday

* US not competitive in global market
* EU lowers crop estimates 1 mmt  
* US crop estimates steady at 15 bbu  
* Argentine crop estimate rising 
* Yearly sales -86 mbu last year
* China buying Palm Oil 
* US crop expected to rise 50 mbu
* Argentine acres to decline even more
* Very little replanting reported in Brazil 
* Yearly sales -592 mbu from 2020

* EU trims wheat production by 700,000 mt  
* EU still predicts higher carryout  
* Wheat priced out of feed grain market 
* Ukraine winter wheat planting winds down  
* Yearly sales -138 mbu

* New hog production surfaces in China 
* High food costs limit meat demand
* 2021 beef sales 16,700 mt
* 2022 beef sales 3,500 mt
* 2021 pork sales 45,700 mt

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