News Source: SETZ

Afternoon Comments; Wednesday, March 3rd, 2021

Corn, soybeans, and wheat were all under moderate pressure today as long liquidation resumed. The buying that surfaced yesterday did not generate any follow through interest which was a primary cause of the correction. More favorable production estimates for South America and a noticeable decline in export interest added to the pressure on US markets. Investors are also showing more interest in outside markets as signs of inflation are building. Losses were held in check by the continued need for rationing of old crop inventory, both globally and domestically.

As expected, ethanol manufacturing rebounded considerably after plants came back on-line from closing due to February’s polar vortex. Ethanol production for the week ending February 26th totaled 5.94 million barrels, a 29% increase from the previous week. Production is still down 21% from a year ago as more plants are still waiting to resume operations. Even with this increase ethanol stocks declined 360,000 barrels and now stand at 22.42 million. This compares to last year’s 25-million-barrel inventory.

Country movement of corn and soybeans has dropped off considerably in recent weeks. Typically we see country movement increase ahead of the spring planting season as farmers empty bins prior to their busy season. We may not see much for movement this year though given the large amount of selling that took place last fall. Reports are now coming in from across the Corn Belt that remaining inventory will not be marketed until there is a better indication of this year’s production.

The La Nina weather event continues to cause disruptions in global commodity production. The most talked about of these remains the drought in South America and also in the Southern US. An area that is getting more attention is what the La Nina may mean for Australian wheat output. Unlike other regions of the world, a La Nina tends to lead to elevated wheat production in Australia such as we had this year. It is believed that without this weather event Australia’s wheat production could be down as much as 25% this coming year.

The La Nina is also having an impact on the US, mainly in the Plains and Southern States. Drought has developed in these states causing a depletion of soil moisture. This has combined with the February cold snap to cause damage in the wheat crop in that region, and now there are reports some fields will likely shift to alternative crops. While it is unlikely this will be a significant volume of acres, thoughts are it may add production to either corn or soybeans.

US weather forecasts are becoming more of a market factor as we approach the spring planting season. Corn planting in the south has been delayed from the late-February winter storm and rain is delaying seeding in the Delta. It is still early though, and progress is expected to gain momentum quickly. The most interest is on the Corn Belt however, where an active planting season is being predicted. There are a few forecasters who believe rains may develop and slow progress, but not enough that is would impact plantings from current estimates.

The United States is now just past the halfway point of the marketing year on corn and soybeans. Corn loadings are up 450 million bu from a year ago and soybean loadings are an incredible 825 mbu more than last year. Even with these elevated volumes there are concerns we may still miss the yearly projection on exports, especially on corn. With three months left to go in the wheat marketing year shipments are only up 29 mbu and may fall behind as well given the recent loading rate.

The window to plant corn in Brazil and have it covered by crop insurance is closing. Typically this brings an end to the planting season in the country. Given the delay to the start of the soybean harvest and the current value on corn farmers are going to continue planting corn though, even without insurance coverage. This is a reason why some analysts are predicting a larger corn crop in Brazil than others.

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.

Morning Comments; Wednesday, March 3rd, 2021

There has been a considerable amount of talk in the market recently on projected US acres, but not very much on yield. In the USDA baseline report average US yields were projected at 180.5 bushels per acre on corn and 50.9 bushels per acre on soybeans. While these would both be higher than what was harvested last year, they may not be enough to satisfy demand. Even with the projected planted acres of 92 million on corn and 90 million on soybeans we may fall short of our expected demand. This is from where the anticipated increase in acres is going to originate from. Many of these additional acres will likely be found in the fringe areas of the Corn Belt which is not known for high yield potential. Acres are also expected to come from the Conservation Reserve Program, which tend to be lower producing and why they were in the program to begin with. The unknown in this is how many prevent plant acres will find their way back into rotation this year. Many of these have high yield potential. The fact remains the United States will need high acres, high yields, and near perfect growing conditions this coming year to satisfy projected demand.

Highlights

* China to plant more corn, less soybeans

* Frost damage reported in Ukraine

* OPEC to consider production changes this week

* Covid vaccines show more promise

* More states drop all restrictions

* Nitrogen fertilizer values spike higher

* Domestic commodity demand remains high

* Kansas topsoil reported at 42% short

* 19 mmt vessel capacity waiting in Brazil

* Fresh news somewhat sparse

Corn

* Argentine crop condition improves

* Total crop loss in Argentina trimmed to 2 mmt

* Global corn basis weakens

* Average US basis 12 cents firmer than last year

* Brazil Safrinha planting nears 40%

Soybeans

* Global crush margins remain firm

* US crush +4.1% from last year

* Average US basis 4 cents better than year ago

* Argentine govt predicts 46 mmt crop

* Brazil harvest nears 25%

Wheat

* Black Sea production estimates rising

* World production in 21/22 est record 790 mmt

* Global production outpacing demand

* Export loadings slip lower

* Chinese auction values at $10.00/bu rising

Livestock

* Packer bids on cattle remain low

* Global demand a worry

* US exports expected to recover

* US slaughter numbers rebound

* China sees mutated cases of ASF

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.

Afternoon Comments; Tuesday, March 2nd, 2021

Futures were on both sides of unchanged today as early selling was met with fresh buying interest. Conflicting crop reports and weather conditions in South America were the main factors in the choppy trade, as were mixed outside markets, including the equities. Wheat was the leader today, taking support from a sharp drop in crop ratings from the Plains. Concerns are building in the market that drought is going to impact production in this region all growing season, and the recent freeze added to crop loss. Corn found support today from a flash sale of 175,000 metric tons to Japan for the 2021/22 marketing year. Soybeans uncovered technical buying interest which erased losses in that complex as well.

The soybean crush report for the month of January came in just over expectations at 196.5 million bu (mbu). This was also the 2nd highest monthly total on record. Cumulative soybean crush is now up 5.71%, well above the 1.6% increase being forecast by the USDA. The monthly crush report also indicated soybeans continue to yield more meal and oil than a year ago. Soybean oil stocks decreased more than expected in the month but were still an adequate 2.3 billion pounds.

Corn usage for ethanol in January was also released, and to no one’s surprise, demand was down. A reported 415.8 mbu of corn was processed into ethanol in January, a 3.7% decrease from December. This was also an 11.43% reduction from January 2020 as plants remain idled. Distiller grain output also decreased in the month to 1.75 million tons, down from 1.79 million in December.

Trade is becoming more optimistic on the Argentine corn crop. Weather conditions have improved in Argentina and the rating of the country’s corn crop has risen as a result. There are now thoughts only 2 million metric tons (mmt) of corn production may have been lost from drought compared to earlier estimates of 6 mmt.

Less optimism is being shown over the state of the Argentine soybean crop. Conditions in the Argentine soybean production region are dry and now temperature have started to rise. For the month of February this area only received 25 to 30% of its normal precipitation. While this was enough to benefit corn, thoughts are it cut the country’s soybean crop by 3 to 4 mmt.

Trade is becoming increasingly concerned with the volume of unshipped US corn sales on the books. There is currently 1.3 billion bu of corn sales that are unshipped at this time. This is a record and compares to just 500 mbu a year ago. Given the wide price spread we are now seeing between the US and other corn sources, mainly Argentina, cancellations of US purchases are becoming more likely.

Of these outstanding sales, the most interest is on China. Of the unshipped US corn sales nearly one-third is to China at 430 mbu. China has announced it will try to expand its domestic corn production this year, mainly by elevating plantings by 1.65 million acres. This will add an estimated 162 mbu of corn to China’s annual production. While this may not eliminate China’s need for imports, it will allow the country to be choosier in where it is sourced from.

Trade is also monitoring soybean demand developments with China. Chinese soybean values have reached record values in recent weeks as stocks dwindle ahead of South American deliveries. Traders are also monitoring the expected increase to corn plantings in China this year and how that may reduce the country’s soybean production in future years. China does have a record volume of soybeans to arrive from South America though, and this is limiting soybean potential.

Another factor that is being closely monitored when it comes to Chinese demand is the ongoing cases of African Swine Fever in the country. New strains are being reported which is making the virus harder to contain. This is why experts in China now claim it will be closer to the end of 2022 before the country’s hog herd is back to pre-outbreak levels. The concern with this is what it means for feed grain imports. It also raises questions on the possibility of additional beef and pork exports rather than grains.

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.

Morning Comments; Tuesday, March 2nd, 2021

Given the tight ending stocks that are again being predicted for the end of the new crop marketing year, analysts are questioning the average price projections being made. In the Ag Outlook Forum the average cash values for new crop were projected at $4.20 on corn, $11.25 on soybeans, and $5.50 on wheat. This is a ten-cent decrease on corn from this year, a ten-cent increase on soybeans, and a fifty-cent increase on wheat. The most doubt is on corn and soybeans. Given the fact that new crop stocks to use are forecast to remain near 10% on corn and 3% on soybeans, these values seem low. This is especially after seeing where futures have rallied this marketing in an attempt to ration demand, and we have seen little success. As a result, nearly all analysts feel new crop corn and soybeans are undervalued at the present time. There is less concern on wheat as even with tightening inventory, the stocks to use is projected at 33%, and while tighter than in recent years, is still and adequate volume. The overall question now is if new crop values will rally to meet those of the current marketing year, and this unknown is limiting cash selling interest.

Highlights

* Brazil harvest remains slow, progressing

* Barge traffic back to normal

* Yearly export forecast too low

* Buyers are showing more interest in So America

* Govt seen ongoing need for Covid relief

* Govt also wants to expand markets beyond China

* More interest on equity market activity

* Inflation becoming a factor

* Ethanol production expected to rebound this week

* Spring insurance values $4.58 on corn, $11.57 on soybeans

Corn

* Safrinha plantings up 3 million acres this year

* China also to increase corn plantings

* Importers shifting demand to Argentina

* Argentine crop rating improves

* US sales 89% of yearly estimates

Soybeans

* Private bump Brazil crop to 136 mmt

* Brazil now source of choice for global market

* Crush margins rising

* Soy oil highest values in 7 years

* US sales 99% of yearly estimates

Wheat

* Russian taxes push buyers to Australia

* US wheat sales slowing

* US wheat shipments 63% of yearly total

* French wheat rated 87% G/E

* Global wheat production estimates rising

Livestock

* Slaughter numbers rising

* Concerns over slowing exports

* Bid/Ask on cattle widens

* US cattle weights up 20 pounds from last year

* February beef production 97% of last year

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.

Afternoon Comments; Monday, March 1st, 2021

Commodities were firm to start the new month as light buying surfaced following the weak end to February. A more optimistic economic outlook also supported commodities, especially the passing of the $1.9 trillion Covid relief package over the weekend. Futures became mixed though as grains were pressured by a lack of fresh news while worries over weather conditions in Argentina supported soybeans. Eventually sellers surfaced in the soy complex as well and dropped those futures into negative territory as well. All contracts found pressure from a shift in global demand to South America as harvest ramps up in those countries, as do their lower cost offers to importers.

Export inspections for the week ending February 25th were released with mixed numbers. Corn inspections totaled 64.4 million bu (mbu). This is up from recent weeks and above the 61.1 mbu that is needed on a weekly basis to reach the yearly USDA projection. Soybean inspections totaled 32.3 mbu which fell short of the 44.4 mbu that is needed per week. Wheat loadings also fell short of the needed volume with 10 mbu, less than half of the 24.8 mbu required.

It is quite likely our current yearly corn and soybean export forecasts are too low. Corn sales for the marketing year already total 2.32 billion bu (bbu), 89% of the projected total of 2.6 bbu. Soybean bookings already total 2.2 bbu, 99% of the 2.25 bbu projection. This means for the remainder of the marketing year the US only needs to sell 11 mbu of corn and 1 mbu of soybeans per week to meet projected totals.

While trade remains heavily focused on the Brazilian soybeans crop, we are starting to see more interest on the country’s corn output. Groups in Brazil have gradually increased their corn crop estimates with several now at 108 million metric tons (mmt). This is still just under the USDA estimate for 109 mmt, but well above the low end of estimates at 105 mmt. The difference in these opinions comes mostly from acreage as farmers in Brazil claim they will keep planters rolling past the optimum window to try and capture record corn values.

Last week’s US ethanol production was one of the lowest seen in recent production as plants took down-time to conserve natural gas. This caused weekly production to decline by a record 28% from the week before. This decline is expected to be very short-lived however, as the rally we have seen in energy values is supporting processing margins. We are also approaching the summer driving season which analysts believe will elevate fuel demand, especially with a rebuilding economy.

Hopes of a rebound in the US economy are supporting commodities on a whole. There are models that indicate the US economy will expand by 6% this year, much higher than what was earlier predicted. This comes from the positive response we have seen to Covid vaccines and how cases have been on a steady decline, easing restrictions that have been in place for months.

The average spring crop insurance values have now been set. These are calculated using the average new crop values for the month of February. This average came out at $4.58 for December corn and $11.57 for November soybeans. These are much better than we have seen in recent years which is not a surprise given the highs that have been established in those contracts in the month. These values will likely limit new crop selling interest, as even though they are below the spot market, they are above break-even for many producers.

The US beef industry is giving trade mixed signals. According to February slaughter numbers, January beef processing numbers were down 5% from a year ago. At the same time, US beef production was only down 3% on the year. This is from higher cattle weights, with the monthly average being 20 pounds higher than in January 2020.

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.

Morning Comments; Monday, March 1st, 2021

Trade is questioning the balance sheet numbers that were released in the Ag Outlook Forum. Even with a considerable increase in plantings of both corn and soybeans, ending stocks are forecast to remain tight. If the acreage and yield estimates the USDA released last month were correct, the United States will barely see any increase in ending stocks at all. These numbers will give the US new crop ending stocks of 1.55 billion bu on corn and 145 million bu on soybeans. This is a mere 50 million bu increase on corn and 25 million bu increase on soybeans. This leaves very little room for production loss this year and will likely make the market more sensitive to anything that may reduce yields, especially weather. Current weather models indicate a warm, dry start to the US growing season, but this can actually be bearish as it does not indicate planting delays. Springs like this also tend to lead to elevated plantings. The real question is what will happen once the crops are planted. As a result, we will likely see elevated risk premium in futures values. These numbers will likely be debated all month as trade prepares for the March 31st planting intentions report.

Highlights

* Bird Flu spreading in Asia

* ASF still spreading in China

* Private field scouts raising SAM crop estimates

* US logistics starting to improve

* Country sales very light

* Economists predict 6% economic expansion this year

* Inflation remains a worry

* Argentina more competitive in global market

* Attention already on month end reports

* Most interest on acreage, stocks need attention as well

Corn

* Trade concerned with unshipped sales volume

* Cancellations more likely with high unshipped sales

* US seeing little pressure from Ukraine

* Argentine corn a sharp discount to US

* Safrinha planting near 25% complete

Soybeans

* Chinese demand questioned

* Global oilseed market has corrected

* Jan crush today est 195.6 mbu

* US needs record soybean yields this year

* Brazil exports on the rise

Wheat

* Global wheat trade is active

* US loadings slipping lower

* China remains top wheat destination

* Heavy losses reported in Texas crop

* Winter wheat rating improves

Livestock

* Wholesale beef remains strong

* Hogs becoming overbought

* Summer contracts at all-time highs

* US beef stocks up 6.35% from last year

* US pork stocks tightest since 1998

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.

Afternoon Comments; Friday, February 26th, 2021

Corn, soybeans, and wheat were all under pressure today as month end liquidation and profit taking developed. Improved South American weather conditions and elevated yield estimates were also behind the weaker futures, as were thoughts we are seeing a shift in global demand. South America is undercutting the US on both corn and soybeans and Australia is providing most of the world’s wheat. Ideas that China may scale back its feed needs as hog disease continues to impact the country weighed on the soy complex. A sharp rebound in the US dollar and inflation worries were negative for all commodities.

Developments in the Chinese hog industry affected trade all week. Early reports that China’s hog herd was building gave the soy complex support as it generated ideas of elevated imports for feed. This opinion reversed late in the week as other data showed it may take another year or longer to see China’s hog production back to pre-African Swine Fever levels. This generated ideas that China will not need the volume of feed grain imports as earlier suspected. There is an outside chance this could lead to cancellations of current Chinese bookings, especially if the market recedes.

New crop corn and soybean values firmed this week in an attempt to sway uncommitted acres to one crop or the other. Soybeans gained the edge in this move as the ratio narrowed to 2.6:1 which favors the crop over corn, but just barely. Hopes are this is enough to encourage new acres into soybeans, especially those that were prevent plant last year. If the soy complex cannot sway these into production, it is unlikely we will see the complex achieve its needed 90 million planted acres.

Ukraine officials released their grain stocks report this week. As of February 1st, Ukraine grain stocks stood at 18.2 million metric tons (mmt), 3.5 mmt less than a year ago. This decrease is mainly from 2020 production that was 9.5 mmt less than 2019 as drought hit the country late in the growing season. Even with this decline Ukraine remains an active exporter of both corn and wheat, although not at the volume of a year ago.

We continue to hear conflicting production reports out of South America, especially Brazil. According to several reports, the late January rains in Brazil were beneficial for the soybean crop, and estimates are starting to be raised as a result. More of these are starting to reach the 134 mmt mark. The bulk of the Brazilian harvest is ahead of us though as there is little doubt these estimates will change several times. The same is happening on corn where uncertainty over Safrinha plantings are causing a wide array of production estimates.

Trade is looking at Brazilian soybean movement and monitoring the possibility of any sales cancellations. This has been feared all marketing year as soybeans have rallied considerably from where most of the crop was sold, which is also taking place in the United States. Much of Brazil’s soybean crop was forward contracted at $6.00 per bushel, about half of what the current spot market is at. Farmers have indicated they will honor contracts though as they have enough bushels to elevate their average values. This rally has also increased new crop sales in Brazil, indicating next year’s production will be large as well.

The United States has long been the most affordable source in the global market for corn, but this is starting to change. Argentina is offering corn for April/May shipment at a sharp 54 cent per bushel discount to the US gulf. Argentine corn is also 29 cents per bushel under Brazil for that time. Current freight rates give Argentina an even larger advantage, especially over the US.

While Covid cases have been falling in some regions of the world, one area that is being monitored closely is Canada. Canadian officials have reported an outbreak in one of the country’s major hog processing plants. This has led to the plant being closed for an extensive cleaning and caused a back-log in hog slaughter. As a result, some of these hogs have made their way into the United States for processing. While this is only a temporary issue, it is distorting US processing numbers.

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.

Morning Comments; Friday, February 26th, 2021

Better than expected rainfall in Brazil weighed on overnight trade, as did month end profit taking. The majority of today’s session will be spent getting final positions in place ahead of month end. Most of the positioning for this has already taken place, but to see elevated volatility as final positions are moved would not come as a surprise. This is especially the case with today being the first notice day on the March contracts. Once the calendar turns to March, we will start to see a shift in market attitude. For one trade will start to position itself for the March balance sheets. These will receive considerable attention given the tight ending stocks we are working with, especially on soybeans. Trade will also start to focus more on the quarterly stocks and prospective plantings that will be released on the 31st. For the most part trade is expecting to see acreage numbers similar to what was released at the Ag Outlook Forum earlier this month. The initial new crop balance sheet projection will not be released until May, so there will be considerable debate on what we will see for the next several weeks. We will also start to see more attention on US weather reports, especially if there are indications of potential delays to planting.

Highlights

* Analysts more optimistic on South American crops

* Ukraine shopping for oilseed imports

* US corn/soy ratio at 2.6:1

* World grain production nearly equal to consumption

* IGC raises world grain production forecast

* Weekly export sales slump

* Sales still better than needed to reach USDA yearly est

* Trade looking forward to March WASDE report

* More interest on 31st acreage/stocks reports

* FND on March contracts is today

Corn

* New crop demand starting to build

* Safrinha plantings advancing

* High prices encourage planting to continue

* US spot corn cheapest to Asia

* April forward bids favor SAM

Soybeans

* Delays continue to Brazil deliveries

* Brazil harvest slowest in past 10 years

* New crop values to encourage US plantings

* Country selling has shut off

* Export demand is fading, still high

Wheat

* Logistics favor wheat feeding in Asian market

* Ukraine grain exports -21% on the year

* Australia continues to undercut world market

* US loadings continue to slow

* Higher US carryout likely

Livestock

* Cash cattle trade remains light

* Boxed beef values fading

* Covid impacts Canadian packers

* Some Canadian hogs delivered to US packers

* US slaughter recovering from closures

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.

Afternoon Comments; Thursday, February 25th, 2021

Trade was mixed in the overnight session with soybeans leading the charge. Soybean support came from reports of China showing more interest in US offers from the Pacific Northwest. This pushed nearby soybeans to a new contract high in the overnight session. New highs were also established in new crop corn and soybeans as well. A weaker US dollar added to market strength. Advances were erased by lower than expected weekly export sales and higher production numbers from the International Grains Council. Soybeans took additional pressure from reports Chinese crushers are slowing operations to bridge the gap until Brazil soybeans arrive rather than making purchases from the US.

Export sales for the week ending February 18th were below trade guesses across the board. Corn sales were split with 17.8 million bu (mbu) on old crop and 5.7 mbu new crop. Soybean sales were a low 6.2 mbu old crop and 2.6 mbu new crop. Wheat bookings totaled 6.2 mbu on old crop and just 500,000 bu of new crop. Even with these low totals, corn and soybeans still topped the volume needed per week to meet USDA projections.

Beef and pork export sales for the week were also down. Beef sales totaled 8,500 metric tons, a 63% decline from the week before. Major buyers were South Korea and Japan. Pork sales on the week reached 25,600 metric tons, down 23% from the previous week. Mexico, Japan, and China were the top buyers.

The International Grains Council released its monthly production numbers today, raising them from the January numbers. World grain production is now forecast at 2.21 billion metric tons (bmt). This was mainly from a record global wheat crop which is forecast to total 773 million metric tons (mmt) compared to last month’s 768 mmt prediction. The IGC projected a world corn crop of 1.14 bmt and a soybean crop of 360 mmt, both 1 mmt higher than last month. The IGC is predicting a grain consumption number that is just over production at 2.22 bmt.

More attention is being placed on the 2021/22 stocks to use estimates on corn and soybeans. The US ending stocks on both of these is expected to remain relatively unchanged from this year with 10% on corn and 3% on soybeans. These are very tight projections and leave no room for crop loss this growing season. It also means the United States will need to continue to ration inventory next year as well, and possibly the following year if crops are on the low side.

South American weather remains a focal point of the market as dry conditions are forecast to continue in Argentina for the next two weeks. Temperatures are also forecast to rise in this region, as well as Southern Brazil. While this will benefit harvest it may hinder any double cropping in the region. As with the US balance sheets we cannot afford to lose any production in the world market either, which is giving these forecasts more attention than usual.

We have started to see a major shift in the world soybean market. For the past several months the United States has been the primary supplier of soybeans to the global market. This is starting to change with the South American harvest and those suppliers are now the main sources, especially Brazil. This follows the start of the Brazilian soybean harvest, which is also weighing on the Brazilian soybean basis, making their soybeans more affordable than those from the US.

There are thoughts that this drop in Brazilian soybean values will lead to elevated US imports, and while possible, there are questions as to when this may happen. The last time the United States imported a large volume of Brazilian soybeans was in 2014. At that time soybeans from Brazil held an average $50.00 per metric ton advantage over the US. Given current freight rates this spread would need to be closer to $60.00 per metric ton in today’s market. At the present time Brazil soybeans are only $12.00 per metric ton under the US, making large imports unlikely at this time.

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.

Morning Comments; Thursday, February 25th, 2021

Although it remains slower than normal, the harvest in South America is advancing. Exports have been light so far, especially out of Brazil. This will likely change in the next few weeks though as more soybeans become available for shipment. In fact, most analysts are predicting record soybean exports out of Brazil for the next several weeks. There is little doubt this will slow demand for US soybeans, although we will continue to see loadings of soybean sales already on the books. Trade will also closely monitor this shift in demand to see if any cancellations take place. Before long we will start to see analysts take the soybean loading pace out of Brazil and try to determine how long it will last. The soybean crop in Brazil is forecast to be record sized, and to see the country’s export season last longer than normal would not come as a surprise. Given the slow start it is not out of the question that the window for additional US sales at the end of Brazil’s export season may be limited. While this wouldn’t necessarily be bearish for trade, it may take reduce the bullish outlook.

Highlights

* Weekly drop in US ethanol production a record 28%

* Ethanol margins back to breakeven on crude rally

* Trade waiting for more accurate La Nina data

* China to push domestic production higher

* Argentine crop ratings decline

* Data starting to be collected for March 31st report

* Ocean freight at 10 year high

* Parts of Corn Belt remain in drought conditions

* Global commodities rally with US

* FND on March contracts is tomorrow

Corn

* Planting picks up in Brazil

* US interior basis remains firm

* Argentine crop est 5.5 mmt under last year

* US corn loadings 36% of yearly estimate

* Average insurance value at $4.56

Soybeans

* Canola holding at record high values

* Brazil exports gain momentum

* Record Brazil exports predicted for next 2 months

* 11% of Argentine crop rated Poor/Very Poor

* Average Insurance value at $11.78

Wheat

* Black Sea continues to support global futures

* Bitter cold another week in Black Sea

* March 15th insurance date on wheat approaching

* US carryout estimate continues to decrease

* Feed demand remains high

Livestock

* China pork imports slowing

* US slaughter numbers remain low

* Feed costs pressuring margins

* Packer margins remain high

* US consumer demand rising

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.

Afternoon Comments; Wednesday, February 24th, 2021

Soybeans were again the leader early in today’s session with support coming from South American weather and mixed yield reports. Many sources in Brazil are reporting lower than expected yields as harvest progresses, but also claim they are improving. This is giving credibility to the elevated production numbers we have seen for Brazil. Wheat values were quick to surpass soybeans and corn though, taking support from production losses in the Southern US and lower than expected crop ratings in the Plains. All contracts benefited from weather models that indicate drought conditions may continue to the US into the spring planting season and possibly beyond.

The Brazilian soybean harvest remains slowed and recent rains will cause additional delays. A reported 15% of the Brazilian soybean crop has now been harvested, just half of last year’s pace. This is the slowest start to the Brazilian harvest in the past ten years. While a slow harvest does not mean crop size will be affected, we are hearing of lower than expected yields in some regions of the country, which could end up being a factor. The slow harvest pace is impacting exports as well, with the country only shipping out 20% of the soybeans that it did a year ago.

For now, traders are holding with their current crop estimates in Brazil, even with questionable production. This is holding the soybean crop between 130 and 134 million metric tons (mmt). One of the main differences in Brazilian production is from acreage rather than yield. This is also having an impact on the country’s corn crop. Estimates on corn production range from 105 mmt to 109 mmt. How much Safrinha gets planted is the main factor for crop size.

Much of the attention in the global market has been on oilseeds, but we are now seeing more on corn. Corn reserves in the European Union have tightened and pushed corn values to new highs. We are also seeing elevated values in the Black Sea as the Ukraine supply is also smaller than a year ago. Brazil is seeing its corn values rally as well as uncertainty builds on the size of the Safrinha crop, especially after depleting its reserves last year. Thoughts are this will keep buyers coming to the US for needs for the next several months, and possibly well into the next marketing year.

We are also seeing more interest on the global wheat crop. This is coming from mixed production reports following recent cold snaps around the world. All interest in the US is on the Texas crop where reports indicate up to 16 million bu of production may be totally lost. The Black Sea is also reporting widespread losses as those countries have little snow cover to protect the crops. The question in the world market now is if record production in Australia will make up for these losses.

Questions are rising over China’s future feed demand. Chinese officials claim hog production in the country will rebound to pre-African Swine Fever levels by June. When this disease outbreak happened China was forced to cull 40% of its hog herd, reducing feed grain demand as it did. As the hog herd started to rebuild, China upped its feed grain imports, including corn and soybeans. There remain disease issues in the country and the recovery is now expected to take longer than initial thought. This could easily reduce China’s buying of commodities for the next few months.

As expected, ethanol manufacturing dropped a considerable amount last week as plants took down time due to the extreme cold across much of the US. Production for the week ending February 19th totaled 4.6 million barrels, a sizable 1.77-million-barrel decrease from the previous week. Ethanol stocks also dropped sharply, coming in at 22.79 million barrels, 1.5 million fewer than the week before. US ethanol stocks are also well below the year ago total of 24.72 million barrels.

The cold storage report for January has been released with mixed numbers. Beef in storage on January 31st totaled 519.2 million pounds, down from the December total, but up from last year’s 488 million pounds. Pork in cold storage totaled 460 million pounds at the end of January, 45 million more pounds than the end of December, but well under the 625.6 million pounds at the end of January 2020. Pork belly inventory totaled 31.25 million pounds, slightly higher than in December, but considerably less than the 70.9 million from 2020.

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.

Morning Comments; Wednesday, February 24th, 2021

Trade is showing more interest in what we may see for new crop balance sheets. This follow the Ag Outlook Forum last week that projected ending stocks at 1.55 billion bu on corn, 145 million bu on soybeans, and 698 million bu for wheat. These are all tight stocks compared to recent years, and for soybeans, this remains a minimal 3.2% stocks to use. This means rationing will likely continue in the soy complex for several more months, and possibly into following marketing years as well. The unknown in the soybean balance sheets is what will happen globally. If South America continues to produce record sized crops it may lighten demand for US soybeans and allow balance sheets to rebuild. Trade is also going to continue to monitor the balance sheets on the grains, as even though they are currently adequate, any production loss could generate rationing in them as well. This is especially the case for corn where the stocks to use is already at 10%. Wheat has more of a cushion with a 33% stocks to use. These tight balance sheets will keep more emphasis on weather during the growing season.

Highlights

* South American weather remains mixed

* US recovering from last week’s winter storm

* Country/river movement still backlogged

* Weather forecasts still favorable for early US planting

* US feed demand underestimated

* Record US grain/soy production this year may be too little

* China/Australia still in trade dispute

* Lower ethanol production expected today

* Plants still recovering from shut downs

* Long range ethanol margins firming

Corn

* China corn higher since end of LNY

* Brazil corn crop rating improves

* Late planting still a concern for development

* Rally in US encourages SAM expansion

* Ukraine corn exports to rise

Soybeans

* Canola making new all-time highs

* Palm oil at 12 year high

* Global buyers waiting for Brazil supply

* Uruguay to expand plantings 7%

* Brazil to continue expanding acres 3-4%

Wheat

* US crop loss better known

* Texas reports losses of 16 mbu

* Black Sea losses building as well

* China buying wheat from Argentina

* US export loadings slowing

Livestock

* Beef in cold storage at 519.2 mil pounds

* Pork in cold storage at 460 mil pounds

* Frozen pork bellies at 31.25 million pounds

* Trade starting to predict summer demand

* Chinese hog disease to limit recovery

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.

Afternoon Comments; Tuesday, February 23rd, 2021

Soybeans were the well-defined leader today as fresh buying interest surfaced in that complex. This came from questionable production data out of South America and the continued need to ration US reserves. A rally in the global oilseed market, including canola and palm oil, supported soybeans as well. We are also seeing more interest in new crop values with both corn and soybeans setting new highs overnight. Wheat futures struggled today on news that last week’s cold temperatures likely caused less damage than expected.

Corn, soybeans, and wheat have all moved into sideways trading patterns. While we have seen gains and losses, the overall pattern remains sideways as trade awaits fresh news. The next chance of a market moving rally will likely be spring weather and a threat to US production. Any less than expected production in South America from current estimates will also have market impacts. The influence of the outside markets will continue to drive commodities as well, mainly the value of the US dollar.

While improved, there are still concerns over Argentine weather. Widespread rains moved through the country in January, but these failed to materialize in February. As a result, February is going down as one of the driest of the of the past 30 years in the country. Analysts are quick to point out that Argentina experienced similar conditions in 2019 but still produced normal crops.

It is no surprise that China is back in the news and wishing to renegotiate current trade deals with President Biden. China is hoping that tariffs will be removed, and existing deals will be renegotiated. The main one of these is the Phase 1 agreement, although China has not singled it out. China is also hoping the US will back out of Hong Kong and Taiwan political issues. Given China’s current commodity demand, it is unlikely they will back away from US imports if current sanctions stay in place.

The US economy is becoming more of a market factor. Managed money traders have turned to financial markets, mainly bonds, as they are concerned with inflation taking place. This is also causing volatility to build in the US dollar and causing further weakness in its value, which is actually a benefit for commodity values. Traders are now waiting to see what will be included in the next government Covid relief package and how it may impact consumer spending.

It appears as though soybean traders are finally starting to step up and push new crop futures harder to encourage plantings. November soybean futures topped the $12.00 market yesterday for the first time since July 2014 and extended this move today. Even with higher soybean plantings being forecast by the USDA, the stocks to use ratio on new crop soybeans is projected at a minimal 3.2%. It will likely take at least two years to get out of this situation in soybeans, depending heavily upon how much production we see in South America.

The question is how much interest farmers will show in elevated soybean plantings, even with higher futures. The primary reason for this is that new crop corn is also rallying, keeping the spread at a level that does not favor one crop or the other. Many farmers in the US already have their new crop acres locked in, with several already having inputs booked or even applied which makes shifting more difficult. This will put more emphasis on the March 31st planting intentions report.

Chinese officials have announced they believe the country’s hog herd will be back to 2017 levels by the end of June. This was just prior to the outbreak of African Swine Fever that devastated the country’s production. There are doubts over this target though as not only is ASF resurging in the country, but we are seeing other disease outbreaks as well. This has led to several of China’s hogs being culled, especially sows. As a result, it is believed that is may be well into 2022 before the Chinese hog herd can rebuild.

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.

Morning Comments; Tuesday, February 23rd, 2021

Fund attitude remains a driving factor of price discovery. Funds have been holding onto their long position for several months and show little signs of liquidating it at the present time. The main reason for the holding of this position is the current stocks to use on corn and soybeans and the need for rationing. The likelihood of this situation carrying over into our next marketing year is adding to the attitude to remain long. This does not mean we will not see selling at times, but that a total liquidation is unlikely. A factor that could change this opinion is the possibility of large crops in the United States this year. If trade starts to become more comfortable with the US production numbers this year we may start to see funds liquidate their long position. This is unlikely to happen for several months however, and possibly not until we get into our next harvest. We need to remember that funds can be financially driven however, and any change in the outside markets may be a factor in how long funds remain long as well. Funds are not showing as much interest in the wheat complex as that crop is not seeing the tight balance sheets corn and soybeans are.

Highlights

* Doubt cast over US new crop balance sheets

* Argentine crop ratings declines

* US will need above trend yields this year

* Record US plantings doubted

* US barge traffic remains slow

* Gulf demand slowing

* US ethanol production at a 20-week low

* China to promote self-reliance on commodities

* China hog herd back to 2017 levels by June

* President Biden asked to ease Chinese trade sanctions

Corn

* Delays in Safrinha planting continue

* Safrinha could suffer freeze damage if not planted soon

* US basis remains firm

* Argentine harvest slow to start as well

* US forecast looks favorable for planting

Soybeans

* Processors pushing for deliveries

* Chinese demand a record this year

* Previous Chinese buying record was 36 mmt in 16/17

* SAM soy quality remains a concern

* Futures continue to favor soy plantings

Wheat

* US acres may be higher than expected

* Snow cover benefits US fields

* Russia may be out of exportable wheat

* March 15th deadline for insurance nears

* Tax uncertainty to limit Russian sales

Livestock

* Global beef trade has risen in 8 of 9 years

* 2021 beef trade projected at a record 20.5 bil pounds

* China to account for 31% of beef imports

* Ten years ago China was 1% of global trade

* US is leading supplier of world beef needs

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.

Afternoon Comments; Monday, February 22nd, 2021

Corn, soybeans, and wheat started out the week’s trade firm but turned mixed by mid-session. The grains held firm as trade starts to add risk premium to those contracts while soybeans were pressured from the advancing harvest in South America. The absence of any Chinese purchases following their Lunar New Year celebration weighed on the market as well. Trade is starting to show more doubt over the Ag Outlook Forum data though which provided support though, and caused all contracts to finish the day in positive territory.

A couple of last week’s Ag Outlook Forum numbers are still being sorted through by trade. One set of numbers is the acreage increases for corn and soybeans. The USDA predicts increases in plantings of 1.2 million acres on corn and 8.7 million acres of soybeans. While these are sizable builds, especially on soybeans, they may not be enough. Models indicate that not only will acres need to increase this much, but yields will need to be above trend to prevent stocks from being depleted, especially on soybeans.

Trade is also revisiting the wheat numbers that were released. Ending stocks on wheat are forecast to tighten to 698 million bu (mbu) by the end of the 2021/22 marketing year. This compares to ending stocks of 1.03 billion bu at the end of the 2019/20 marketing year. While this is still an adequate surplus, carryout has been declining for the past few years. There are also thoughts that this year’s production is overestimated and ending stocks will be even tighter than the forum indicated.

Doubts are being cast over the current US soybean import figure of 35 mbu. Many analysts feel this is too low and actual imports will be twice as high, and possibly a record, topping the previous record of 72 mbu. The US may see more meal imports though, as it is easier to import that product than whole soybeans which then need to be processed. This is especially the case for the Southeast feed market. This shift in demand could easily alter the current soybean import figure.

One factor that trade continues to monitor on soybean balance sheets is Chinese demand. While China is still in the market for soybeans, they are looking at sourcing from the cheapest point possible. Right now, this would favor Brazil over the US. The fact that China is in need of soybeans and crush margins are quite favorable in the country may keep China buying from all sources however, including the US.

There are changes being proposed to China’s Agriculture Industry that could have significant long-term effects on global trade. These have been released in what China is calling their Number One Document. In these, China is proposing the allowance of GMO grain production, possibly as soon as 2022. There are also changes being made to livestock which would include the building of more modern production facilities. These changes are being made to not only make China more independent in the global market, but also to help limit inflation.

Export inspections for the week ending February 18th favored soybeans over the grains. Soybean inspections totaled 26.5 mbu, and while the volume continues to decline, it is still twice the amount needed to reach the yearly USDA projected total. Grain loadings were under the volume needed with 48.5 mbu on corn and 11.9 mbu on soybeans.

A benefit for US grain exports this year has been a lack of competition from Ukraine. So far Ukraine has only exported 30.8 million metric tons of grains, a 20% reduction from last year. Of this 13.3 mmt has been wheat and 13 mmt has been corn. This decline in Ukraine exports is from a smaller grains crop, with total production estimated at 45.4 mmt compared to last year’s 57 mmt.

The February cattle on feed report contained some unexpected numbers. As of February 1st the US had 12.1 million head of cattle on feed, 101% of a year ago, and was in line with estimates. Cattle placements in January were higher than expected at 2.02 million, 103% of the number from a year ago. Marketings were less than expected at 1.82 million head, just 94% of last January’s total.

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.

Morning Comments; Monday, February 22nd, 2021

The majority of this week’s trade will be spent getting positions in place ahead of month end. This will generate more activity this month as all three of the spot contracts go into delivery. We have already had several spot contracts rolled to the deferred months, but we always see a few right before month end. This can easily create wide price swings. As we see a transition from February to March, we will also see a shift in market attitude. This is the time of year when more interest is placed on new crop development and potential crop sizes. This started with the Ag Outlook Forum last week when the initial new crop balance sheet estimates were released. These were a pre-cursor to the planting intentions that will be released at the end of March and the first official new crop balance sheets that will be released in May. As we see this shift in market focus take place, we will also see a change in the fundamentals that impact daily price discovery. These will include daily weather outlooks and planting reports. We will continue to see attention placed on old crop balance sheets however, especially with the need for rationing on old crop stocks.

Highlights

* China back from LNY, hoping for business

* Funds remain heavily long corn, soybeans

* Net farm income expected to increase 5.5% in 2021

* NWS predicts a warm spring

* Cold weather has slowed fertilizer applications

* US ethanol industry also slowed

* Brazil exports remain sluggish, starting to build

* Next 3-4 weeks critical for Brazil crops

* Farm lenders increasing credit limits

* March First Notice Day is Friday

Corn

* US corn loadings up 410 mbu from last year

* Japan becomes leading destination for corn

* Trade disregards Mexico’s GMO policy

* Ethanol slow down to lessen demand

* Feed demand spikes on cold weather

Soybeans

* Brazil harvest only 1/3 normal rate

* Brazil yields vary considerably

* Yearly US inspections up 802 mbu

* US likely to import meal

* Global crush margins rebound

Wheat

* Russia crop estimates questioned

* Australia remains top source for global needs

* Analysts start to reduce yearly demand

* Export inspections down 2% from last year

* Feed demand to increase

Livestock

* Feb 1st cattle on feed 101% year ago

* Feb 1st COF 12.1 million head

* January placements 103% last year

* Placements totaled 2.02 million

* Marketings -6% at 1.82 million

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.

Afternoon Comments; Tuesday, February 16th, 2021

Trade started out the holiday shortened week on the positive side as buyers surfaced in the entire market. This was not just the commodities, but the equity and energy markets as well. Global weather was supportive for trade today as harsh winter conditions have plagued the US and Black Sea while heavy rains continue to disrupt harvest in South America. A rally in global oilseed values offered additional support to the soy complex. Concerns over the impact of global weather on grain production offered support to those contracts. Traders were somewhat limited in their activity today as they awaited the Ag Outlook Forum numbers that will be released Thursday and Friday.

The winter weather that has hit the United States is creating logistic issues for the ag industry. Country movement is practically non-existent as bitter cold temperatures and heavy snows have impacted nearly every state of the Corn Belt and beyond. River logistics are also being disrupted as ice is slowing barge movement on the upper river system. Basis incentives have been posted for quick ship deliveries as a result, but these are failing to generate much interest, especially with the majority of old crop bushels already marketed.

Logistics are also becoming an issue in Brazil as harvest gets underway. While the main supply line highway in the country, BR-163, has been fully paved, other issues remain. A main one of these is port capacity. Trucks in Brazil are now making it to ports faster than they can be unloaded which has led to a backlog of 10,000 trucks waiting to unload over the weekend. Brazil also has other highways that need paving, which will likely take years to complete. This is why emphasis has been placed on building rail lines in the country instead.

Bloomberg News released their survey numbers ahead of this week’s Ag Outlook Forum. This survey indicates farmers will plant 92.9 million acres of corn this year and produce a 15.24 billion bu (bbu) crop. This is a 2.1 million acre increase from last year and 1 bbu more production. Ending stocks from this are pegged at 1.73 bbu compared to the 1.5 bbu ending stocks that are projected for this year.

The Bloomberg survey points to 89.8 million acres of soybeans and a crop of 4.52 bbu. This is 6.7 million more acres than what were planted this year and a 385 million bu (mbu) larger crop. Ending stocks are projected at 179 mbu by Bloomberg, a mere 59 mbu more than what is predicted for this year by the USDA.

Australian officials have updated their wheat crop estimates now that harvest of the crop is nearly complete. This crop is now projected at a record 33.3 million metric tons (mmt) and nearly twice as much wheat as Australia produced a year ago. The previous record was 31.8 mmt. This increase is negating some of the worry over production losses in other regions of the world, including the possibility of winterkill in the US and Black Sea.

Export inspections for the week ending February 12th were down from the week before, especially on soybeans. Soybean loadings for the week totaled 29.8 mbu, a 57% decrease on the week. This was still twice the volume needed on a weekly basis to meet the yearly USDA projection. Corn loadings were below needs with 52 mbu as were wheat inspections at 14.4 mbu.

The National Oilseed Producers Association, or NOPA, crush report for January was released today. Soybean crush by NOPA members in January totaled 184.65 mbu. This was above the average trade estimate and the 2nd highest monthly total on record. Soy oil stocks held by NOPA members came in at an eight-month high 1.8 billion pounds, up 1 billion from December 2020. NOPA also reported a decline in meal exports for the month.

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.

Morning Comments; Tuesday, February 16th, 2021

Now that we are well past the monthly WASDE report more interest is again falling on the South American soybean harvest. Total soybean harvest in Brazil remains the slowest in the past ten years, but it is gaining momentum. What is more notable is the yields that are being reported. Initial soybean yields in Brazil were above expectations given the weather the crop was subjected to, and these have continued to rise. Initial soybean yields in Brazil were ranging from 60 to 65 bushels per acre, but in some cases, these have increased to range from 70 to 75 bushels per acre. This is considerably higher than expected and is starting to cause changes to crop size estimates as well. It is doubtful soybean yields will range this high through the entire Brazilian harvest, but these high numbers will offset losses in other regions. The attention now is shifting to the planting of the Safrinha crop. Many analysts claim Safrinha acres will be down given the late start to the soybean harvest, but this is not necessarily true. The ability to lock in sizable profits will likely keep farmers planting longer than normal, even with less than ideal weather.

Highlights

* Trade may see more sales cancelled

* US ethanol consumption expected to rise

* US ethanol reserves at 1 billion gallons

* Crude oil becoming over-bought

* February on track for one of coldest in 126 years

* US balance sheets expected to remain tight next year as well

* GMO debate continues in Mexico

* Trade expects record NOPA crush today

* Futures currently termed as “fair value”

* Ag Outlook Forum in Washington this week

Corn

* US accounts for 35.5% of global trade

* Brazil is 21% of world supply

* Argentina 18.3% of world supply

* Argentine crop est raised 2.5 mmt

* Ethanol margins remain pressured

Soybeans

* Palm Oil supports soybeans overnight

* US soybean carryout is 9 day supply

* US imports likely to rise

* Global crush margins remain pressured

* NOPA crush est a record 183 mbu

Wheat

* US supplies 13.8% of global needs

* EU market share equal to US

* Black Sea to produce larger crop

* Global wheat feeding to rise

* Most increase seen in China

Livestock

* China shifts from pork to beef imports

* US pork exports slowing

* Total pork commitments -53% from last year

* Wholesale pork -$4.00/cwt from year ago

* US seeing heavier slaughter weights

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.

Afternoon Comments; Monday, February 8th, 2021

Trade was firm to start today’s session as short covering ahead of tomorrow’s WASDE report developed. Most traders are expecting lower carryout totals which is providing underlying support. The possibility of elevated South American production limited advances as yields on Brazilian soybeans continue to come in above expectations. Weather supported today’s trade, mainly drought in Argentina and the threat of winterkill on wheat in several parts of the globe. Ongoing reports of elevated Chinese demand were beneficial, although we failed to see any flash sale announcements. Speculative buying ahead of tomorrow’s reports gave us stronger closes across the board.

Census export data for the month of December has been released and as expected numbers were quite high. Corn exports for the month totaled 181.8 million bu (mbu). This was the highest December total since the 2007/08 marketing year. Soybean exports in December set an all-time record for the month with 397.5 mbu. This was enough to put soybean exports since the start of the marketing year at 1.494 billion bu.

December beef and pork export numbers were also released by Census. Beef exports in December 2020 were a record at 285.8 million pounds. Total beef exports for 2020 were a three-year low at 2.96 billion pounds given the slow start to the year from the Covid outbreak. Pork exports in December totaled 636 million pounds which was a 7% decline from a year ago, ending a 17-month steak of higher export totals. Yearly pork exports were still a record at 7.28 billion pounds.

Export inspections for the week ending February 4th favored corn and soybeans over wheat. Corn loadings were above the needed amount to reach the yearly USDA objective at 62 mbu, as were soybean inspections at 66.2 mbu. Wheat inspections fell short of the needed volume with 16.2 mbu. This raises concerns for wheat as the yearly export total is now behind a year ago.

For the past several months the United States has been the main supplier of corn to the global market. One reason for this is the US was the cheapest source of corn, but also from a lack of competition. This is now starting to change as other corn export countries are starting to make exports, including Argentina. Argentine corn is also now offered at a discount to the US which will start to gain more attention if the spread widens.

Another country that continues to export corn is Brazil which is being closely monitored by trade. Brazil has already exported more corn than the USDA expected which is raising questions on their remaining corn supply. This has cut Brazil’s domestic corn reserves to the lowest level in the past ten years at an estimated 4.9 million metric tons (mmt). This may limit how much corn Brazil is able to export this year, especially at the start of their harvest.

There are also questions starting to arise over Brazilian corn production. The USDA attaché in Brazil lowered its corn crop estimate 2 mmt to a total of 105 mmt given the slow start to the country’s soybean harvest. Not only does the attaché believe this will impact acres but push crop maturity into Brazil’s dry season as well. While this is possible, Brazilian farmers have indicated they will keep planting corn as long as possible given current futures and potential returns.

When it comes to US soybean export demand all interest remains on China. China has booked a record volume of US soybeans this year, and in fact, current Chinese bookings equal 90% of all soybean sales from the previous marketing year. The question now is if this Chinese demand will continue or falter as the country rebuilds its domestic reserves. The size of the Brazilian soybean crop will also dictate future Chinese demand for US soybeans, even if their appetite is unchanged from this year.

USDA forecasters are warning that net farm income will likely be down in 2021 from 2020. Forecasters believe net farm income will decline 8% as direct payments will be cut in half from last year. These payments accounted for 40% of farm income in 2020. The USDA is predicting net farm income this year at $111 billion though as commodity values are expected to remain high.

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.

Morning Comments; Monday, February 8th, 2021

The majority of today’s session will be spent getting final positions in place ahead of tomorrow’s monthly balance sheet release. Typically the February report gets little market interest as more attention is on the data that will come out of the Ag Outlook Forum in a couple weeks, and more importantly the acreage projections at the end of March. Given the historically low soybean carryout estimate, more focus is on the report this month, however. Two points of most interest are the US ending stocks and South American production. US corn carryout is forecast to decrease to just 1.1 billion bu and soybeans to 100 million bu, both of which are levels that need to be rationed. The most interest on these will likely fall on soybeans. Global numbers will also be updated with South America being the main point of interest. Analysts had been reducing South American crop sizes due to adverse weather, but these started to increase after rains moved through in the last half of January. Not only could this take place on soybeans, but possibly corn as well. There are also thoughts Brazilian acres are larger than currently reported which could raise crop sizes as well, particularly on soybeans.

Highlights

* Brazil harvest advances, yields increase

* Little impact from Brazil trucker strike

* Crude values the highest in a year

* Gasoline values highest in 10 years

* Fertilizer applications indicate higher corn acres

* Futures indicate more soybean acres

* Processors do not have significant coverage

* Global food inflation becomes an issue

* Soil moisture in Argentina reported as “adequate”

* February WASDE report tomorrow at 11:00 AM CT

Corn

* Private Brazil crop estimates above USDA

* Thoughts are US carryout will decline 200-300 mbu

* Brazil 1st corn harvest is 15% complete

* Rains encourage double cropping in SAM

* Light SAM exports through summer

Soybeans

* Wide range of US carryout estimates

* Average Brazil crop estimate is 133 mmt

* Reports of 70 bpa soybeans in Brazil

* Brazil harvest remains slowest in 10 years

* New crop US export sales building

Wheat

* Buyers shopping for cheap wheat

* US shipments trail last year

* Wheat continues to displace corn for feed

* Ukraine exports at 75% of quota

* US wheat sales up 5.3% from last year

Livestock

* Brazil beef exports in Jan -9,600 mt from last year

* US sees less global beef competition

* Very light cash movement

* Disease continues to impact Chinese hog industry

* Slaughter numbers remain light

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.

Afternoon Comments; Wednesday, February 3rd, 2021

Trade was firmer today following a weak start. Soybeans managed to rebound after trading sharply lower overnight as fresh buying surfaced on the break. The ongoing need for rationing supported soybeans, although advances were limited by weakness in the global oilseed market. The grains were under pressure with the biggest losses in wheat as newly imposed export tariffs in the global market have not slowed trade. Corn was more of a follower today but did find technical support. There were no daily flash sales announced which limited fresh buying interest.

Wheat futures were under moderate pressure early today as even though several of the global wheat producing countries have enacted measures to deter demand, they are having little impact on sales. The most noted of these is Russia who continues to make sales almost daily. This is because the new export fees have not gone into effect and we are seeing heavy sales before they do. As a result, buyers are showing less interest in US offers.

Ethanol manufacturing data for the week ending January 22nd was released today with less than favorable numbers. Ethanol manufacturing for the week ending January 22nd totaled 6.55 million barrels. While this was a 21,000-barrel increase on the week, it was 13.4% less than a year ago. Ethanol stocks jumped by a large 714,000 barrels and now stand at 24.3 million. This is the largest ethanol inventory since last May and compares to the year ago figure of 23.47 million barrels.

More concerns are starting to be given to the US corn and soybean availability for later this marketing year. There are several models that indicate our current usage rate will deplete soybean reserves by summer which is why several crushers have halted meal sales. Ethanol producers hope to see elevated demand for fuel by then as the US sees a return to more normal travel activity. The question now is if corn stocks shrink and futures will rally, will margins again turn negative? Given these possibilities, domestic usage of commodities may decline from current estimates.

The United States is not the only country showing worry over future commodity stocks. Several of the world’s leading grain and oilseed producers have placed restrictions on exports to help ensure adequate domestic reserves. This is also helping with food inflation. The commodity seeing this the most is wheat, even though the world wheat supply remains adequate. The United States tends to use prices to ration demand rather than tariffs and quotas, but some economists believe this needs to change.

The spread between corn and wheat is starting to become more of a market factor. This has narrowed to just $1.00 per bushel and is starting to gain the interest of corn buyers, mainly for feed. Typically we do not see feeders shy away from high corn values, but availability may make it more of a reality this year. This is especially true if soy meal becomes harder to secure, as wheat has a higher protein content than corn. This will be closely monitored over the next several months.

We continue to receive mixed weather reports out of South America, but for the most part, trade is viewing them as beneficial for crop development. Brazil has received widespread rains to help alleviate dry soils, but in regions with excessive rainfall, rust fungus is now becoming an issue. Argentina has also received beneficial rains, but these are expected to diminish and bring a return to drier than normal conditions. While crop loss may happen, at least for now, trade is viewing the precipitation as beneficial.

The rains in Brazil have generated other issues for soybean growers. Some farmers in Brazil opted to push ahead with harvest as soon as possible to try and capture as much of the current rally in values as possible. Many of these soybeans were harvested at higher than optimum moisture levels and are now becoming hard to store. In some cases this is already creating quality issues and farmers are defaulting on deliveries as a result.

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.

Morning Comments; Wednesday, February 3rd, 2021

One of the main functions of the market recently has been the rationing of old crop supplies, mainly on soybeans. While this has been attempted, the United States has continued to sell large volumes of old crop soybeans. One reason for this is that the US has been the only source of soybeans and products in the global market for the past several weeks. This has brought buyers to the United States for soy needs regardless of price. Another reason is that while soybean values have rallied the US dollar has faded, countering the higher move in soybean futures. The US is now in the position where it may need to make soybean imports to satisfy needs. There are thoughts the US could end up seeing 70 million bu of soybean imports this marketing year which is twice what the USDA is currently expecting. It also compares to the 15 million bu that were imported in the 2019/20 marketing year. There are now concerns that with buying interesting shifting to corn the US will need to start rationing that commodity as well or possibly end up in the same situation as soybeans.

Highlights

* Ukraine grain exports -20% this year

* Rally in soy oil hurts US biodiesel

* Buyers have been surfacing on breaks

* Rains continue to benefit SAM crops

* More rain forecast for Brazil

* Reports of wet soybeans in Brazil causing quality issues

* Brazil farmers defaulting on sales

* Argentina to turn drier

* World debt the highest since WWII

* Rationing still needed, globally and domestically

Corn

* Yearly corn commitments 75% of estimates

* Normal commitment pace is 58%

* Sorghum sales up 405%

* Double crop seeding in Brazil slowest since 2011

* Feed wheat displacing corn

Soybeans

* China remains top US buyer

* Export demand shifting to new crop

* Yearly sales 95% of estimates

* Brazil soybeans 10 cents under US

* US crush likely underestimated

Wheat

* US wheat sales +4% from last year

* Firming US dollar weighs on wheat

* Global crop is relatively good shape

* Buyers back away from Russian offers

* China only sells 54% of wheat at auction

Livestock

* US beef reserves at 37 month high

* Beef supply up 11% from last year

* US pork supply -30% from last year

* US pork supply lowest since 2010

* Chinese imports to increase

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.