AgriVisor Morning MarketWatch

Friday, January 28, 2022
Weather is currently one of the leading fundamental factors in price discovery. While weather has become a perpetual influence given the shift to a global market, there are times of the year when interest is heightened. This is one of those as weather conditions are impacting South American production and now starting to be more of a factor in the United States as we approach the spring season. For South America, conditions are expected to moderate this week with cooler temperatures and elevated rain chances. While this will be welcomed, there has already been a considerable amount of crop loss in some regions of South America, mainly Southern Brazil and Paraguay. Paraguay has just experienced its driest three month stretch in 45 years. With conditions moderating now the question is if it will benefit later planted crops and what it means for double cropping. In the US we are starting to see more interest on long range models and what impact they may have on seeding and potential acres. Forecast models indicate a warm, dry spring for much of the Corn Belt which tends to elevate corn plantings. This is being countered by ideas that high inputs will reduce the desire to raise that crop. This is already causing an elevated amount of risk premium in the entire market, and elevating volatility.  

* Global inflation not slowing
* China to increase GMO production
* Delays seen to Brazil exports
* Black Sea issues impact global currencies  
* China’s 2021 trade surplus a record $676 bil   
* China surplus 60% higher than 2029
* Covid mandates continue to impact global trade
* Global ethanol demand is rising       
* US ethanol stocks becoming burdensome
* February to start dry in Argentina

* Weekly sales of 55.2 mbu old crop, -6.5 mbu new crop
* Export loadings need to average 57 mbu/week
* Safrinha crop 5% planted
* Ukraine exports at 14 mmt 
* Ukraine exports at 50% of projections 
* Sales for week at 33.7 mbu old crop, 7.5 mbu new crop 
* Analysts hold Brazil crop at 134 mmt
* Argentine crop est 43 mmt     
* China shopping for late summer coverage  
* US loadings need to average 25 mbu/wk     

* Weekly sales total a marketing year high 24.4 mbu
* Loadings need to average 19 mbu/wk
* US wheat loadings slowest in 5 years  
* Winter wheat ratings decline 
* Weather adding issues for Black Sea exports
* Weekly beef sales at 14,300 mt 
* Weekly pork sales at 49,100 mt  
* US hogs technically overbought  
* Weekly hog slaughter -280,000 head
* US pork reserves lowest since 2010

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.