E-Visor Reports: Market Watch

Monday, December 28, 2020
Position balancing will be the main focus of the market through the early part of this week. There are only four full sessions this week as trade will be closed Friday for the New Years Holiday. Traders will start positioning ahead of this as Friday also brings month and quarter end. Many traders already have their positioning done but there will definitely be some this week. This week’s trade will be thin, and this positioning can easily cause exaggerated movement in the futures market. We are also starting to see elevated positioning ahead of the monthly WASDE report that will be released on January 12th. This is one of the most watched of the year as it contains the final production numbers for the old crop year. The most interest on this release will fall on soybean ending stocks as they are expected to shrink even further, even with price rationing taking place. We are also seeing more interest develop on domestic usage as crush on soybeans remains high, but we have started to see a cut back in ethanol production. It is not out of the question that a decline in domestic corn use could simply offset any increase in exports. 

* US stimulus package passes
* Hopes are consumer spending will rise
* Crude oil -3% last week
* Lower US dollar pushed futures higher
* US cash sales at 90% on soybeans, 65% on corn
* US farmers now selling new crop production
* Importers shifting to 2021 coverage as well
* Thursday is FND for Jan contracts
* Trade closed Friday for New Years
* Normal trade through then

* Chinese corn demand increases 
* Trade questions export loading estimates
* Analysts hold Brazil crop at 102 mmt, Argentine at 47 mmt
* Brazil rains to encourage double cropping 
* Buyers not pushing for coverage
* Crush margins tighten
* Argentine strike see progress in talks
* US farm sales at 90%, normal is 65% 
* May see elevated double cropping in SAM 
* Brazil crop estimate held at 130 mmt 
* China not finding auction buyers
* US loadings equal to last year 
* Russia puts exports at 37.5 mmt
* UK expects 40% smaller crop this year
* Ukraine to hold current export regulations for now
* Chinese pork values lowest of the year
* Holiday trade depresses sales
* Packers report adequate coverage
* Hog weights remain high
* High weights indicate back-log continues

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.