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E-Visor Reports: Market Watch

 
Thursday, December 17, 2020
Country movement of farm stored inventory is sporadic at the present time which is not uncommon ahead of year end. The majority of the movement taking place right now is simple year end cash flow adjusting. This is much less than what we have seen in recent years though for two reasons. For one fewer and fewer farmers use the calendar year for tax purposes which makes incomes right now less of a factor. Another reason for slow sales is the tremendous amount of sales that were made at harvest and the income was deferred. Farmers will simply use this income if needed rather than making fresh sales. This large volume of deferred payments may impact country movement of commodities long past the end of the year. It is not uncommon to see elevated selling right after the first of the year, but those sales will likely be limited this year. The question now is when additional sales may take place, and it may not be until closer to spring. The result of this is a tighter than normal basis for corn, soybeans, and wheat. Even with this selling is limited and most movement is coming from commercials.  

Highlights
* Farmer movement remains light
* Food inflation a concern in global market
* Market remains concerned with lockdowns
* Trade starting to thin ahead of Christmas/New Years
* CONAB raises Brazil ethanol production estimate
* US ethanol stocks up for 7th straight week
* US ethanol stocks highest since May
* Brazil Senate approves foreign ownership of land
* Exports demand thins ahead of holidays
* Low sales expected on soybeans, wheat today

Corn
* Average US cash value $4.04
* Seeing interior pushes for immediate deliveries
* Ethanol bids backing down
* Yearly corn inspections at 470 mbu
* Rumors of large Brazil sales to China
 
Soybeans
* Basis values holding steady
* Interest now on Jan weather in Brazil
* Technical resistance again stops rally
* Soy inspections record large for this date
* Privates continue to put Brazil crop between 130 and 134 mmt
 
Wheat
* Russia dumping wheat into global market
* Buyers pushing sales ahead of tariff changes
* US wheat loadings +1% year ago
* US Plains see beneficial moisture
* Argentine farmers 38% sold, last year was 59%
 
Livestock
* Cash cattle trade is light
* Most sales from $106 to $108
* China hog futures start trading on January 8th 
* China domestic herd building
* China starting to stock up for Lunar New Year

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