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E-Visor Reports: Market Watch

 
Monday, September 28, 2020
Futures were mixed overnight as a lack of fresh news and a hesitation to establish new positions ahead of Wednesday’s USDA reports limited interest. Trade will again be focused on the weekly harvest report from the USDA this evening. Last week’s numbers showed just 8% of the US corn and 6% of the soybean crops had been harvested. The most interest was on corn where more progress was expected. Trade is well aware of the fact that just like during the planting season, harvest can happen faster than it can be reported. To see these numbers jump tonight would not come as a surprise. Given the relatively open weather forecasts we have for fieldwork, any slower pace may be even more overlooked. Slow harvest only tends to be a factor in year’s with low grain inventories, which this year is not. What may be more of a topic than activity is yield reports as we will start to get more data this week and a better look at potential crop size. Trade will also spend the early portion of this week preparing for the quarterly stocks and small grains report on Wednesday. Wednesday also brings month and quarter end which can heighten fund positioning as well. 

Highlights
* Global commodity demand now being questioned
* US flash sales slow, China becomes absent
* Market waiting for economic stimulus package
* 2nd wave of Covid a concern
* Weather remains harvest friendly
* US is seeing more La Nina signs
* Ethanol production closing in on last year’s pace
* Cattle on feed numbers remain high
* USDA reports on Wednesday
* Wednesday is also month, quarter end

Corn
* Gulf basis is firming
* Interior basis 16 cents weaker than year ago
* Ethanol values see pressure
* Harvest near 20% tonight
* Farmers not selling much corn
 
Soybeans
* Gulf basis mostly steady
* Average interior basis 25 cents firmer than last year
* US soy sales +193% year ago
* Harvest near 15% tonight
* Farmers selling larger volumes of soybeans 
 
Wheat
* Russian exports record paced
* Ukraine grain stocks -4mmt last year
* Paris milling wheat at 5-maonth high
* Currency values favor global wheat over US
* Argentina lower crop est 3.5 mmt
 
Livestock
* Sep 1st cattle on feed +4% last year at 11.39 million head
* Record number of cattle being fed 
* Placements 109% and marketings 97% in August
* US pork belly supply lowest since Oct 2018
* Packer margins shrink, still quite favorable

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.