E-Visor Reports: Market Watch

Wednesday, January 06, 2021
The need for rationing and influx of managed money into commodities continues to support futures. With little in the way of technical resistance, advances remain sizable. We are now less than a full week away from the much-anticipated January supply and demand numbers. Nearly all analysts are predicting smaller US ending stocks in this release, especially on soybeans. Demand rationing has had little effect on the soy complex as buyers continue to show up for US offerings, even at elevated values. The multi-year lows in the US dollar are also making it harder to ration soybeans as this negates the rally in soybean futures. Thoughts are this demand will drop soybean ending stocks below the 100 million bu level. Even if the USDA does not publish a number that low this month, it is expected prior to the end of the marketing year which is still several months away. The question may be what is done with other sources of demand, especially the residual selection, which has been known to be altered enough to show adequate reserves in the past. Corn and wheat stocks are also expected to tighten but not by a significant amount at this time. The most interest in the January release may fall on the quarterly stocks as of December 1st as they will verify the demand we have seen. 

* USDA announces 5th Food Box purchase worth $1.5 billion
* No news on 2021 Bio-fuel blend rates
* Brazil may see excessive rains in February, delaying harvest
* Some regions of South America benefit from recent rains
* Overbought indicators not affecting market rally
* Worries build over “new” Covid strain
* Local economies struggle with Covid impact
* China/EU form trade alliance
* Argentine crush plants again operational
* US dollar sets multi-year lows 

* Corn at $10.70 in China, $6.40 in Brazil 
* Argentine reliability questioned
* China imports to rise short term
* US corn sales +135% year ago
* Corn shipments -3% from average 
* Chinese meal a record $518/mt
* Global oilseed market at record highs
* US soybean sales +87% from last year
* Cumulative sales at 92% of estimates
* Harvest building in South America
* US wheat sales 9% ahead of last year
* Total sales at 77% of yearly estimates
* Yearly sales 2% behind average
* Chinese auctions continue to draw little interest
* Importers looking for optional origin purchases
* Meat exports rising
* Pork cut outs firm
* Boxed beef values softer
* Packers report adequate coverage
* Economy remains supportive

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.