E-Visor Reports: Market Watch

Friday, December 11, 2020
Now that the monthly supply and demand revisions have been released, trade will start to shift its focus. The most interest in the market will now fall on year end positioning. While several weeks away, the holiday’s will shorten up the period traders have to alter their positions. Funds have already shed several long positions in recent sessions, so unless they wish to establish a short position, additional selling may be limited. We will also soon start to see harvest taking place in South America. While this is a few weeks away we may start to get a clearer picture of actual crop size. Demand will start to be driven more so by the approaching harvest in South America as more buyers now have adequate coverage in place to last until new crop bushels are available. This will mostly affect soybeans as Brazil starts their harvest. The US is likely to remain the main origination point on corn, unless Argentina finally starts to sell their old crop reserves. We will also soon start to see positioning for the January WASDE release. The January release tends to garner more attention as it contains the final production updates for the marketing year. 

* WASDE reductions not as large as expected
* Covid remains driver of commodity demand
* Privates believe SAM production may rise
* Argentine strikes have little impact on trade
* US may see more export competition from Ukraine
* New crop corn/soy ratio at 2.6:1
* US/China trade tensions build
* Fund buying expected in early 2021
* Fresh news becoming sparse
* Market now focused on holiday trade

* US corn carryout 1.7 bbu
* US average value at $4.00
* World carryout at 289 mmt
* Ukraine exports raised 1.5 mmt
* Chinese corn imports +3.5 mmt
* US carryout 175 mbu
* Average soy value $10.55
* Global carryout at 85.6 mmt
* US stocks/use tightest since 2013/14 
* US crush a record 2.195 bbu
* US carryout 862 mbu
* Average US value $4.70
* World ending stocks 316.5 mmt
* World production a record 773.7 mmt
* Global crop likely larger next year
* Weekly beef exports at 3,000 mt, -78% last week
* Pork sales at 26,500 mt, -15% a week ago
* 2021 beef sales at 12,000 mt, pork at 6,400 mt
* 2021 been production est 27.23 billion pounds
* 2021 pork production est 28.34 billion pounds

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.