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E-Visor Reports: Market Watch

 
Tuesday, October 20, 2020
As expected, the US harvest pace remains well ahead of average. The soybeans crop is now 75% harvested compared to the average 58% for this date. Corn is now 60% harvested with the normal rate for this date being 43%. Given current weather models these numbers should advance again next week.  While Us weather is losing its influence on the commodity market conditions are still being monitored. This is from the fact that fall tillage is taking place in regions where harvest has concluded. Trade tends to monitor this activity for an indication of what we may see for acres the next year. This may be more of a factor this year given the tight ending stocks estimate on soybeans and to need to rebuild reserves. Historically the more favorable weather is in the fall the more tillage and fertilizer that is applied. In turn, this tends to lead to elevated corn acres. This is not what the market needs and is supporting new crop soybeans over corn. The price ratio on the two is out to 2.7:1 which already favors soybean production over corn. There are thoughts this spread could become even greater if trade becomes more concerned on a potential shortfall in soybean production.  

Highlights
* Economists claim commodities in a “new market phase”
* Concerns building over rising food costs
* Brazil suspends import tariff temporarily
* Global commodity values at record highs
* Corn based ethanol production in Brazil to double
* Russian weather remains worrisome
* US drought conditions build 
* Upper US Plains experiencing coldest October in 125 years
* Potential major snow event in Dakotas this weekend
* US farm subsidies hit record high $51.2 billion

Corn
* Corn now 97% mature
* US harvest 60% complete
* China corn value at $9.73/bu 
* Chinese corn highest since 2006
* Trade predicts fewer US corn acres next year
 
Soybeans
* 97% of crop dropping leaves
* Crop is 75% harvested
* Economics favor soybean plantings over corn
* US crush margins under pressure 
* Chinese soybean values $18.24/bu
 
Wheat
* Winter wheat 77% planted
* Winter crop is 51% emerged
* Argentine crop lowered to 17 mmt
* EU total production estimates rising
* EU exports upped 2.5 mmt
 
Livestock
* Weekly cattle slaughter rises
* Weekly hog slaughter declines
* Yearly beef exports at 631,838 metric tons
* Yearly pork exports at 1.484 million metric tons
* Total 2019 pork exports only totaled 1.624 mmt

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.