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E-Visor Reports: Market Watch

 
Thursday, September 17, 2020
As the fall harvest season begins, we are starting to see seasonal changes to the commodity market, mainly on the cash side. Typically once the fall harvest gets underway, we see pressure on commodity futures. This is mostly in the form of a weakening basis as country movement tends to increase. In recent years buyers have shown more resilience to harvest pressure though as it is more affordable for them to secure bushels at harvest rather than try to buy them later in the year. As a result, basis values have not weakened as much as they have in past years. One factor that will impact basis is obviously what commodity we see the most movement on, corn or soybeans. At the present time there is considerable carry in the corn market which is a signal to hold inventory until later in the marketing year. Conversely there is no carry in soybeans which is a sign sales should take place now. This is being verified by economists who claim more soybeans will be sold at harvest than held. At the same time, many farmers believe soybeans have more price potential given recent Chinese demand. Whichever one of these scenarios we see take place will impact basis for the next several weeks, if not months. 

Highlights
* Market starting to position for November election
* Global energy market demand down into 2022
* US ethanol stocks decline
* Crop quality hints at lower production numbers
* Global economy to contract 4.5% this year
* China works to expand EU trade
* Sally misses most of US production
* Starting to see more harvest pressure
* Crops maturing faster than normal
* Weather favorable for crops to finish

Corn
* China to increase US imports
* China reduces domestic production
* Fast harvest likely this year
* Trade monitoring corn exports closely
* Frost damage reported in Upper Plains
 
Soybeans
* Brazil exports 1-3 mmt higher than thought
* Brazil sales 32.3% ahead of last year
* Brazil now making imports to cover needs
* US exports ahead of last year
* US crush margins see pressure
 
Wheat
* Yearly loadings +8% year ago
* Winter wheat acres to increase
* Canadian production expanding
* US needs to remain competitive 
* Buyers again stockpiling wheat
 
Livestock
* China bans pork from US plant
* Consumer demand slipping lower
* Fears renew over ASF spreading
* US slaughter numbers slowing
* Wholesale values become mixed

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.