News Source: SETZ

Morning Comments; Friday, May 14th, 2021

Now that we are past the May WASDE report we will likely see a shift in market focus. Until this point the majority of the attention in the market has been on old crop balance sheets. We will now see this split between old crop and new crop. Any changes to old crop will have a direct impact on the new crop balance sheets, but so will other factors such as weather and actual acreage. This will put more emphasis on the June 30th revisions we will see to prospective plantings from March. Several reports from across the Corn Belt indicate we will see higher acres on both corn and soybeans. According to some sources, total plantings may increase by as much as 4 million acres. If correct, this will greatly impact new crop production figures, especially on soybeans. While new crop soybean ending stocks would remain tight it would ease concerns over depleting reserves altogether. An increase would also ease some concerns over potential yield loss, but it is doubtful we would see a total removal of risk premium. We will also start to see more emphasis on growing season weather at this point now that planting is in its later stages across the Corn Belt as crop development becomes a main factor in price discovery.

Highlights
* Long-term market outlook remains supportive
* US needs more rains in WCB
* US crops need heat units
* Chinese feed grain demand to rise
* 30% of Brazil crop sees no rains for 60 days
* Cash markets driving futures
* China limiting ag information releases
* Reports of spring wheat shifting to corn
* Trade looking forward to June 30th reports
* Most attention will be on acreage changes

Corn
* Chinese corn import figure 5 mmt above USDA
* Trade not expecting many more cancellations 
* China has 435 mbu of purchases on books
* Record corn values in China
* Big corn planting advance again next week

Soybeans
* Soy planting near 75% next week
* Trade expecting more acres
* Global oilseed values remain strong
* China has 27.5 mbu unshipped bookings
* Brazil harvest pressure lifting

Wheat
* South Korea buying feed wheat 
* Low US winter crop rating a concern
* US unlikely to reach sales projection
* Chinese production to decline 2% this year
* Feed demand to keep rising 

Livestock
* High feed costs a global concern
* Poor pasture keeps cull rate high 
* Inflation a retail issue 
* Weekly beef sales -13% at 13,100 mt
* Weekly pork sales -69% at 14,700 mt


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, May 13th, 2021

Trade has now had time to digest the supply and demand data that was released in yesterday’s session. We need to remember that the new crop balance sheets that were released yesterday were preliminary and will change several times prior to the end of the next marketing year. One factor that is apparent is that the United States cannot afford to lose any production this year at all. This is especially the case on soybeans, but we are also approaching the same level on corn. Some analysts believe we have seen the highest corn production numbers for the new crop year, and we will see declines from this point. While possible, trade will want to see confirmation before driving futures much higher as we are starting to see demand rationing already take place. This is especially in the livestock industry where herd liquidation is underway from a combination of high corn values and poor pasture conditions. One thing that should be expected for the next several months is higher volatility than we have seen in recent years. Now that this data has been released we will see interest shift back to actual field reports and weather forecasts for daily price discovery.  

Highlights
* Continued reaction to WASDE numbers
* US ethanol stocks at 4-year low
* Dry weather building in China
* US tax changes may impact land sales
* India continues to see high Covid numbers
* US processing margins remain favorable
* Argentine exports remain slow
* China showing food security concerns
* China to increase food grain production
* US dollar rebounds on inflation concerns

Corn
* Old crop carryout 1.25 bbu
* New crop yield 179.5 bpa, crop 14.99 bbu 
* New crop carryout 1.5 bbu
* 2021/22 world supply up 8.8 mmt
* Brazil production down to 102 mmt

Soybeans
* Old crop carryout 120 mbu
* New crop yield 50.8 bpa, crop at 4.4 bbu
* New crop carryout 140 mbu
* World 21/22 ending stocks +4.6 mmt
* Chinese imports up 17% from last year

Wheat
* Old crop carryout 872 mbu 
* New crop production at 1.87 bbu
* New crop carryout 774 mbu
* World wheat stocks 295 mmt
* Higher wheat feeding expected 

Livestock
* 2021 beef production at 27.9 billion pounds
* 2022 beef production 27.34 billion pounds 
* 2021 pork production at 28.22 billion pounds 
* 2022 pork production at 28.55 billion pounds
* Average price est $121.50 on steers, $55.75 on hogs


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, May 12th, 2021

At long last the USDA will release its monthly supply and demand numbers today. As stated several times this will contain our first official look at what the USDA is projecting for new crop balance sheets. Typically these numbers do not stray from what were released in the baseline projections or the Ag Outlook Forum. This year may be different however, as several factors have changed in the market since that data was released. The most of this has been to old crop demand and how it will impact new crop balance sheets as well. This is especially the case for soybeans where thoughts are new crop ending stocks will be just as tight as old crop. From this point forward trade will closely monitor both as changes to old crop balance sheets will have a direct impact on both crop years. We will see just as much interest on the global numbers today as well. This is especially the case for South American production where we have seen several changes to production estimates recently, mainly on the Brazilian Safrinha crop. Trade will also closely monitor global demand especially on feed. Overall Chinese demand will also be a focal point as we have seen indications they may be overbooked on their coverage.

Highlights
* WASDE report at 11:00 AM CT
* Most attention will fall on new crop
* Global balance sheets expected to tighten 
* Export taxes slowing Argentine sales
* More countries raising non-traditional feed grains
* Asian market sourcing needs from Ukraine
* End users report low coverage
* US crops need heat units
* High prices deter import buying
* Producer selling slows

Corn
* Old crop carryout est 1.275 bbu
* New crop yield est 179.4 bpa 
* Crop size est 15.03 bbu
* New crop carryout est 1.34 bbu
* Global ending stocks est 279.5 mmt

Soybeans
* Old crop carryout est 117 mbu
* New crop yield est 50.9 bpa
* Crop size est 4.43 bbu
* New crop carryout est 138 mbu
* Global carryout est 86.5 mmt

Wheat
* Old crop carryout est 846 mbu 
* New crop production at 1.87 bbu
* New crop carryout 730 mbu
* World wheat stocks est 295.4 mmt
* Higher wheat feeding expected 

Livestock
* Weekly cattle slaughter -10,000 head
* Year to date cattle slaughter 11.92 million 
* Weekly hog slaughter -50,000 
* Boxed beef remains strong
* Pork cut outs correct


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, May 11th, 2021

As expected, a large amount of planting took place in the US last week, even with widespread rains. The US corn crop is now 67% seeded, just under the average trade guess, but 15 points ahead of the five-year average. The crop is also 20% emerged which is 1 point ahead of normal. This improvement was more of a concern as last week the rate was behind average. The US soybean crop is now 42% seeded, nearly double the 22% that is average. Soybeans are 10% emerged which is also ahead of average. This has been an area of concern on soybeans as well, as temperatures have not been favorable for crop development this year. Much of today’s session will be spent getting final positions in place ahead of tomorrow’s long-awaited May supply and demand report. This will give us our first set of official new crop balance sheets. While we have seen several estimates on this report, these are the numbers that trade will start to use to determine new crop carryout possibilities. The most interest will likely fall on soybeans, as there are several models that indicate without the combination of elevated production and ongoing rationing soybean reserves will even tighter next year, and potentially depleted.  

Highlights
* Canada now reporting major drought
* China hopping for ethanol
* China also shopping for new crop corn and soybeans 
* US farmers hold little old crop inventory
* China/US working on Phase 2 trade agreement
* Global imports rise to fill food reserves
* Reports of Brazil farmers abandoning poor fields
* Multiple years needed to build US commodity reserves
* May WASDE report tomorrow
* All eyes will be on new crop balance sheets

Corn
* Corn is 67% planted
* Emergence is 20% 
* China rolling old crop bookings to new crop
* Higher acreage expected
* Plantings on less than ideal land

Soybeans
* Crop is 42% planted
* Emergence is 10%
* Unshipped sales lowest in 7 years
* Cash values support futures
* New crop demand is sluggish

Wheat
* Winter wheat 49% G/E 
* Spring wheat 70% planted
* Spring wheat 29% emerged
* Argentine exports to increase 3-4 mmt
* India wheat crop estimate reduced 

Livestock
* Negotiated hogs highest since 2001
* Slaughter numbers on cows a 10 year high
* Cow slaughter highest seasonally in 4 years
* US breeding cow reduction greatest since 2012
* High feed costs weighing on all feeders


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, May 10th, 2021

The early portion of this week’s trade will be spent getting positions in place ahead of the monthly WASDE report. This month will give us out first real look at new crop balance sheets and be closely monitored. Nearly all models indicate ending stocks will remain tight from this year to next, especially on soybeans. This will depend heavily upon crop size obviously and puts more emphasis on actual acreage. Using current acreage estimates ending stocks of corn and soybeans will remain just as tight next year as this year. The general consensus of the market is that actual plantings this year will be higher than the USDA published in the March planting intentions report, the question is how much higher. Even if we add a half-million acres to each it may not give us much more of a carryout cushion. It may take a million or more to ease the tight carryout forecast for new crop, especially on soybeans. We will also see a large amount of interest on this week’s crop progress report. Several regions of the Corn Belt claim planting is winding down. This now makes any lack of precipitation more of a factor in price discovery, especially in areas where soil moisture is already at a deficit.

Highlights
* Weekend rains beneficial for crops
* US trucker shortage a market concern
* Higher US product costs predicted 
* US may see tight gas supplies this summer
* Interest rates expected to rise
* Cash market driving futures
* US acreage may expand by 3-4 million
* Current ratio is 2.35:1
* Machinery sales in Brazil +22%
* Brazil ethanol exports to decline 24% from low crops

Corn
* Planting near 75% tonight
* China corn crop est 272 mmt 
* Corn reportedly taking acres from soybeans
* Worries build over additional sales cancellations
* Global corn supply to tighten

Soybeans
* Planting near 45% tonight
* China crop est 18.4 mmt
* Firms continue to raise Brazil crop est
* Chances of Brazil defaults growing
* More US imports from SAM likely 

Wheat
* Spring planting near 70% tonight 
* Canadian exports +26% from last year
* Global production keeps rising
* Upper Plains drought remains a concern
* US wheat shipments to China a 25-year high 

Livestock
* Hog slaughter numbers decline
* Low hog supply a concern
* US meat demand remains high
* Seasonal high in pork tends to be in June
* Brazil April exports up from 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. 
 

Morning Comments; Monday, May 3rd, 2021

Today brings the first trading day of the month, and with it, some big changes for the futures market. Daily price limits will be updated for corn, soybeans, and wheat starting with today’s session. The new daily price limit on corn will be 40 cents per bushel, with an expanded limit of 60 cents. The new soybean limit is $1.00 per bushel with an expanded limit of $1.50. Wheat futures will have a daily limit of 45 cents that will expand to 67 cents. These increases open the door for even more market volatility and the potential for greater price swings, especially when combined with elevated position limits as well. The fact this is taking place right in front of what is expected to be the most volatile weather markets in the past several years could make things very interesting in commodity futures. Now that the calendar has turned to May, we will also start to see more positioning ahead of the long-awaited monthly WASDE report. This will contain the first official look at new crop balance sheets, which many are expecting to be just as tight as old crop. This is especially the case on soybeans, where minimal carryout is predicted.

Highlights

* Large advance in planting expected tonight

* Some regions of Corn Belt claim to be done

* US processor margin remain favorable

* US ethanol production remains low

* Ethanol production 8% under pre-Covid levels

* US over-priced in global market

* Russia to lower export taxes

* Food inflation again a global concern

* India Covid numbers sky rocket

* New daily price limits take effect

Corn

* New 40 cent price limit

* Argentine corn 80 cent discount to US

* Corn planting projected at 50%

* 22% of US corn area in drought

* Safras lowers Brazil corn crop 8 mmt

Soybeans

* New price limit is $1.00/bu

* Brazil soy is 50 cents under US

* 19% of US production area under drought

* China covering summer needs from Brazil

* Census crush today est 188.4 mbu

Wheat

* New daily price limit is 45 cents

* Winter wheat rating to stabilize

* Large advance in spring wheat planting

* World demand is routine

* World wheat supply is adequate

Livestock

* Cash cattle trade is light

* Cattle basis widens

* High carcass weights benefit packers

* World pork supply is tightening

* Technicals pressure livestock futures

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, April 30th, 2021

Trade is still debating the size of South American crops. Over the past week we have seen increases to the Brazilian soybean yields as late season rains proved to be beneficial for the crop. There are now more thoughts that Brazil’s yearly soybean production will reach the 136 million metric tons being projected by several firms. The uncertainty in Brazil is on the Safrinha crop with some firms putting it no larger than 93 million metric tons. This is well below the 109 million metric tons being projected by the USDA among others. If Brazil’s corn production is in fact this low we are likely to see not only minimal export competition, but an increased possibility of Brazilian corn imports. The same uncertainty is taking place in Argentina. Several firms have reduced their soybean crop estimates in Argentina, cutting them from 2 to 2.5 million metric tons and putting the crop near 45 million metric tons. We have also seen reduction to the Argentine corn crop, but it is still holding closer to the 46 to 47 million metric ton range. We are already starting to see projections for next year’s crops in South America with considerable increase in both countries from a return to favorable growing conditions and expanded plantings. Much of today’s session will be spent in month end positioning.

Highlights

* US becoming overbought in global market

* Weather slowing grain planting in Ukraine

* Country movement remains minimal

* More interest on selling new crop

* Brazil to remain warm/dry for Safrinha pollination

* New crop price ratio at 2.45:1

* US GDP +6.4% in 1st quarter

* Consumer spending +10.7% in 1st quarter

* US gasoline demand down 4% from last year

* Big jump in planting expected next week

Corn

* Brazil rating 30 points under last year

* US has up to 550 mbu unshipped sales to China

* 90% of Safrinha crop short on moisture

* Continue to hear rumors of Brazil imports

* Corn futures up 37% this year

Soybeans

* Brazil basis values starting to firm

* Brazil soybeans still under US

* US has very few unshipped sales to China

* Soy oil remains supportive

* Soybeans taking acres from wheat

Wheat

* Russian exports to increase 15%

* Winterkill in Russia minimal

* EU exports -8 mmt from last year

* Wheat futures +16% this year

* Us ratings expected to improve

Livestock

* Chinese hog feeders see huge financial loss

* Cash markets remain firm

* Weekly beef sales at 23,600 mt

* Weekly pork sales at 35,600 mt

* China purchases very 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.

Morning Comments; Thursday, April 29th, 2021

Much of the focus of the market recently from the demand side has been on exports, but we are starting to see this shift to the domestic side. This is especially for renewable fuels as margins have started to increase for both ethanol and biodiesel. This has started to support domestic basis values on both corn and soybeans. The most support that is coming from this change is on soy oil. Soy oil futures are at historically high values on the board and processors are paying a premium to the futures for ownership. As a result, this is allowing crush facilities to pay a premium for soybean deliveries which in turn means a stronger basis. This same scenario is taking place in ethanol where margins have improved, and we are seeing a push for corn coverage. This does not mean exports are still not a factor in price discovery. While demand has slowed in recent weeks as harvest activity increases in South America, we are still seeing buyers surface for US offers. The fact that China is dominating Brazilian exports leaves little room for other buyers. While this demand is not as much as earlier in the marketing year, it is still generating competition for what bushels are available.

Highlights

* US processor bids keep firming

* US economic concerns rising

* Employment gains are at lower wages

* Weekly ethanol draw greater than expected

* US ethanol inventory lowest in 6 months

* US temperatures to warm

* Global oil demand questioned

* Ukraine export values rise

* Brazil harvest pressure is lifting

* Typical seasonal highs are weeks away

Corn

* Brazil Safrinha expected to decline

* Reports of China canceling Ukraine purchases

* Argentine crop estimates rising

* So Africa plantings to increase 7%

* US exports +84% from last year

Soybeans

* Considerable basis incentives being paid

* Crush margins over $2.00/bu

* Buyers worried over late summer supplies

* Firms raising Brazil crop estimate

* Export loadings +65% from last year

Wheat

* Marginal stands may shift to other crops

* May values highest in 7 years

* More reports of crop damage in US

* Yearly loadings +1% from last year

* Global wheat trade has slowed

Livestock

* Slaughter numbers are rising

* YTD cattle slaughter at 10.3 million

* YTD hog slaughter at 41.6 million

* Cash cattle bids soften

* China to produce more efficient hogs

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, April 28th, 2021

The correction that started in yesterday’s session carried over into night trade as well. Overbought technical indicators were a primary cause for this, as is profit taking ahead of month end. While old crop corn and soybean demand remain focal points of the market, we are starting to see a slight shift in interest to new crop demand. New crop soybean sales are ahead of last year at this time and currently total 195 million bu. New crop corn demand is not as strong and only totals 83 million bu at this time. This corn number will likely increase as more doubt is shown over the size of the Brazilian Safrinha crop which provides the global market with a large supply of needs. If there is a concern that the Brazilian crop will be smaller, we will see elevated buying in the US. The global market is also monitoring the Black Sea corn crop as production is forecast to be higher which would negate a portion of the loss in Brazil. A bigger hindrance for new crop corn demand is the shift we have seen in the global market to wheat as a feed grain. This is especially the case in China where a large portion of corn has been offset as not only is wheat more abundant, but it requires less protein supplements.

Highlights

* US farm lending declines in 1st quarter

* No indication of rationing taking place

* Forecasts predict much warmer May temperatures

* Planting to gain momentum

* US Delta remains wet

* 17% of US Wheat Belt in drought

* Market volatility rising

* Argentine govt considers export tax hike

* Funds continue to drive futures

* Market is heavily overbought

Corn

* Cumulative corn sales at 2.65 bbu

* Yearly corn sales +90% from last year

* US needs just 30 mbu from yearly projection

* Importers looking for late summer needs

* Corn may be taking acres from soybeans

Soybeans

* Cumulative corn sales at 2.24 bbu

* Yearly sales +840 mbu from last year

* 45 mbu in sales needed for rest of year

* Slow new crop sales in Argentina

* EU oilseed production to increase 6% this year

Wheat

* Yearly sales at 932 mbu

* US wheat sales -3 mbu from last year

* Wheat Belt sees rains, still in drought

* EU wheat crop up 8 mmt from last year

* Canadian acres shifting to canola

Livestock

* Boxed beef values mixed

* Cattle placements at elevated weights

* Placements ready for market sooner

* Pork cutout showing strength

* Funds holding long hog position

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, April 27th, 2021

Corn planting across the United States was slowed last week which was not unexpected. As of Sunday 17% of the crop was seeded compared to the normal 20% for that date. Corn is also 3% emerged with 4% being the average. Soybeans were 8% seeded, well ahead of the 5% normal rate. The winter wheat rating declined 4 points on the week and now stands at 49%. Winter wheat is also 17% headed with 23% being normal. Spring wheat is reported at 28% planted and 7% emerged, both ahead of normal. Trade will closely monitor the wheat numbers in the next few weeks to see if any acres end up shifting to other crops, mainly soybeans. Now that planting is progressing, we are seeing a mixed opinion on current weather conditions. At the present time several states in the Corn Belt have seen their topsoil moisture levels diminish, with some states in the Upper Plains seeing a considerable decline. This is actually a bearish factor for the market as it allows crops to be planted at a rapid pace. This will change as planting wraps up and moisture is needed for crop development. While there is a lot of growing season ahead of us, and factor that may impact yield this year will receive a market reaction.

Highlights

* Cash market lead futures

* Argentine drought impacting river movement

* China shopping for new crop coverage

* Open Interest is rising

* Major Covid outbreak in India monitored

* Drought builds in Brazil

* Less concern shown on export cancellations

* Markets technically overbought

* Stats Canada acreage today

* FND on May contracts is Friday

Corn

* Crop is 17% planted

* Emergence is 3%

* Brazil acres 2.5 million more than thought

* Rumors Brazil is buying Ukraine corn

* Available inventory becoming scarce

Soybeans

* Crop is 8% planted

* Canadian acres may not be as high as needed

* Brazil may need long-term imports

* Majority of US demand now domestic

* Sizable basis pushes reported

Wheat

* Winter wheat is 49% G/E

* Winter wheat 17% headed

* Spring wheat is 28% planted

* Spring wheat 7% emerged

* Brazil now shifting to wheat feeding

Livestock

* Yearly beef exports +8% last year

* YTD beef shipments at 264,600 mt

* March beef production 118% of February

* US beef supply down for 3 consecutive months

* Chinese poultry values +39% from 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, April 26th. 2021

This week’s trade picked up right where last week ended, with sizable advances in corn, soybeans, and wheat. The most strength was in corn where limit advances were made in response to worsening weather conditions in South America for the Safrinha crop. There are now thoughts this could be no larger than 95 million metric tons. News that Argentina may impose tougher export taxes and limit their sales to help curb inflation in the country. Wheat took its support from global weather concerns and thoughts some acres may convert to soybeans this spring. Soybeans were also firm, but advances were not as great, even with a new crop flash sale of 120,000 metric tons to an unknown.

Mixed production estimates are starting to be released on the Brazilian soybean crop. As harvest starts to wind down, we are seeing larger yields than initially reported. Even though Brazil continues to suffer from drought conditions, rains were received at just the right times to prevent considerable yield loss. The question now is if this has also taken place with Brazil’s Safrinha crop and production will come in at the top end of estimates.

The most attention in Brazil is on the Safrinha crop. Weather in Brazil remains less than ideal for corn production and more analysts are lowering their crop estimates. In many cases these now range from 90 to 95 million metric tons (mmt), considerably less than the 109 mmt the USDA is using in global balance sheets. If the Brazilian crop is this small it will likely increase demand for corn from other sources in the global market, including the United States. This also makes the possibility of contracted sales being cancelled lower, especially to China.

Soybean demand is starting to become mixed. While exports have slowed in recent weeks, domestic crush remains elevated. The USDA is currently using a 2.19 billion bu crush total, but all indications are total yearly demand will come in above that level. This is mainly from the need for soy oil in the global market which is generating favorable crush margins. These are strong enough that soybean processors are not concerned with paying current soybean values to secure coverage.

The new crop price ratio between corn and soybeans is narrowing, which is seasonally not uncommon. The current ratio is 2.46:1, which is mostly neutral, but gives a slight edge to soybeans. Even so, it is not enough to sway acres away from corn. What may be more of a factor in any uncommitted acres shifting to soybeans would be weather and higher input costs on corn. The majority of acres are locked in however, and any changes from March intentions is likely going to be limited.

The Argentine drought has impacted more than just crop production in the country. We are now hearing reports that waterways in Argentina are dropping from the lack of rainfall as well. The most interest is on the Parana River which is a main artery for Argentine exports. Vessels are now being forced to draft lower, meaning they can carry less product to export terminals, and slowed shipments.

Export inspections for the week ending April 22nd favored corn over soybeans and wheat. Corn loadings for the week totaled 76.8 million bu (mbu), nearly 20 mbu above the needed amount per week to reach USDA projections. Soybean inspection fell 6 mbu short of the needed amount with just 8.6 mbu. Wheat inspections were also short of the needed amount with 20.7 mbu, 10 mbu under needs. China was listed as the top destination on grain inspections which was positive for those two commodities.

The April Cattle on Feed report came out with mixed numbers. April 1st cattle on feed totaled 11.9 million head, up 5% from last year. This was at the low end of estimates, but still the 2nd highest number for this time since 1996. Placements in March totaled 2 million head which was again at the bottom of estimates, but still 28% more than a year ago. March marketings were as expected at 2.04 million head, 101% 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.

Morning Comments; Monday, April 26th, 2021

Much of this week’s trade will focus on getting final month end positions in place. Many of the spot commodity contracts go into delivery which will increase market activity. While several of these positions have already been rolled, more will take place. We will also see the market focus on planting and weather conditions across the Corn Belt. Last week’s cold temperatures and precipitation events are thought to have slowed fieldwork across a good portion of the Corn Belt. While it is still early and we have plenty of time to get crops seeded, trade continues to take the stance that if crops are not seeded early yields will be jeopardized. While planting pace can definitely be a factor in production there are several others, including weather during the growing season. Some models are already calling for warm and dry conditions for the Corn Belt this growing season. While early, these are already gathering market attention. This is a scenario that will likely be seen all growing season as the United States needs to see larger crops to satisfy demand, let alone allow for a rebuilding of reserves from the old crop draw-down we have seen this year.

Highlights

* US ethanol production rising

* China raises 2021 import forecasts

* SAM production estimates may be too low

* SAM plantings thought to be underestimated

* US new crop sales picking up

* Major US acreage shift unlikely

* Concerns over crop germination rising

* Additional Covid travel restrictions seen

* Stats Canada acreage today

* FND on May contracts is Friday

Corn

* Jump in weekly plantings expected

* Trade to focus on emergence

* Global feed demand reduced

* China shopping for fall coverage

* Ethanol margins improving

Soybeans

* Plantings to advance this week

* Price ratio favors soybeans over corn

* China to reduce meal usage

* Timely rains benefit Brazil crop

* Biodiesel demand supports complex

Wheat

* Global demand rising

* Concerns over freeze loss in US

* Corn rally elevates wheat feeding

* Wheat [planting set to begin in Argentina

* Spring wheat pushing for acres

Livestock

* April 1st COF 11.9 million; 105% of 2020

* March placements 128% of 2020

* March marketings 101% of 2020

* Grilling demand is rising

* Feed costs pressuring margins

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, April 23rd, 2021

It is not surprising that after a week of consistent gains and new contract highs we had profit taking develop ahead of the weekend. This is especially after futures moved into overbought territory on the charts. Improved US weather outlooks and expectations for an active week of planting next week added to market pressure. Corn was further pressured by reports Argentine vessels are headed to the Southeast US feed market. Losses were limited by a weaker US dollar and the ongoing need to ration old crop inventory, which were enough more than erase early losses. We also had several flash sales on new crop corn, with an unknown booking 336,000 metric tons, China taking 132,000 metric tons, and Guatemala buying 136,680 metric tons.

China remains the world’s leading source of commodity demand, but we are seeing mixed signals on their usage. China is crushing fewer soybeans domestically and their overall demand was lowered by 2 million metric tons (mmt) in the last WASDE report. Crush margins are deep in the red which is limiting China’s processing. China is also importing a larger volume of meal, further reducing their need to crush domestic soybeans. China’s overall feed demand is being questioned as African Swine Fever cases remain high, despite reports the disease was under control.

China is also expected to see a considerable build in soybean reserves in the next ninety days. Chinese soybean deliveries are expected to total 7 mmt in April and 10 mmt in both May and June. This may further pressure crush margins in China, especially if animal numbers do not continue to build. This may give China enough of a soybean reserve that late summer deliveries from the United States will not be needed. To see additional old crop sales rolled to new crop delivery would not be surprising given these circumstances.

While China is a major corn and soybean importer, trade is closely monitoring the country’s unshipped purchases. China has taken delivery of most of its soybean bookings and currently has just 29.4 million bu (mbu) of unshipped purchases. Even with a portion of the unknown sales this total is just 55 mbu. It is doubtful we see much of these cancelled, but even if we do, it may not be that bearish given the tight ending stocks being forecast for the US. More interest is on the unshipped corn purchases, as China has a known unshipped book of 516.1 mbu.

Trade is paying more attention to the topsoil moisture levels across the Corn Belt. Iowa is currently reporting a 29% deficient topsoil moisture level, and Minnesota is 22% short. The greatest deficiencies are in the Dakotas, with North Dakota 78% short and South Dakota 58% short. These conditions are now moving into the Eastern Corn Belt with Indiana being 18% short and Illinois 9% short on topsoil moisture. While these conditions can be favorable for planting, we will need to see rains develop soon to prevent possible yield implications.

We are starting to see as much attention on the Brazilian corn crop quality as we are on yields. According to sources in Brazil the corn crop is currently rated 62% Good/Excellent. This compares to 90% G/E to start the month. As it does in the United States, the greatest concern with a low rating is what is may mean for test weight. It is not uncommon to see low test weights on corn under drought conditions. Not only does this mean more bushels will need to be consumed, but that buyers may be less willing to pay for the corn that is produced. In turn, the US could see elevated demand even after the Safrinha crop is harvested.

The April cold storage report showed declining US meat supplies continues. The US beef supply on April 1st was reported at 483.6 million pounds, down 3.7% from last year. Pork supplies totaled 451.75 million pounds, the lowest amount since 2004. Pork belly inventory was 35.2 million pounds, the lowest supply since 2017. Overall meat supplies on April 1st were the lowest since 2014.

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, April 23rd, 2021

The shift in market interest from old to new crop fundamentals continues. While the old crop contacts still have supportive news, the majority of the strength we have seen in those contracts has been technical. This is especially the case for corn where even though stocks to use is tightening it is unlikely to fall to a point where considerable rationing would be needed. We are actually seeing less support on old crop soybeans where even though our ending stocks are going to be minimal this year it is not fresh news. The primary source of fundamental support on old crop soybeans is crush and how we are seeing elevated demand for soy oil, with that product supporting the entire complex. We are seeing more friendly numbers for new crop though, with more interest falling on corn. Not only is the US corn inventory expected to be tighter next year but so are global stocks. We continue to see uncertain conditions to finish out the Safrinha crop in Brazil which is a major supply for the global market. If this supply is reduced it will generate more demand for US stocks in the global market, and that is giving futures support. Futures finally succumbed to profit taking overnight which gave us weaker futures.

Highlights

* US weather to improve next week

* USDA wants to increase CRP payments

* US acreage ratio at 2.46:1

* US jobless claims a pandemic low

* Trade not worried over current planting pace

* Farmers expected to push plantings next week

* Ag prices expected to hold at +14% from year ago

* Fertilizer values continue to rally

* China looking at next year’s coverage

* Light May deliveries expected

Corn

* Most buyers focused on Argentine offers

* Market focused on unshipped US sales

* More processors pushing for coverage

* Argentine officials increase crop estimates

* Daily limit will change to 40 cents on May 3rd

Soybeans

* Export demand slowing

* More rationing still needed

* Brazil to need soy product imports

* Tight cash market supports futures

* Daily limit will increase to $1.00 on May 3rd

Wheat

* Export interest slowing

* Export loadings may miss projections

* Argentina making large sales

* Chinese auction demand slows

* Daily limit moves to 45 cents on May 3rd

Livestock

* Beef in cold storage -18.7 mil pounds at 483.6 million

* Pork in cold storage -165 million pounds at 451.8 million

* Pork Bellies supply at 35.26 million pounds, -42.9 million

* Weekly beef sales +57% at 29,600 mt

* Weekly pork sales -22,600 mt from cancelations

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, April 22nd, 2021

Buyers continue to surface in the grains and soybeans, giving us fresh contract highs almost daily. The market is currently being led by soybeans, which are being led by the soy oil contract. Vegetable oils around the globe have rallied, pushing soy oil to a 10-year high. Smaller forecasts on the Argentine soybean crop was also supportive. The combination of these factors pushed futures considerably higher, with nearby corn reaching its daily 25-cent limit.

Exports for the week ending April 15th were down from what we have seen in recent weeks indicating price rationing is starting to take place, especially with more inventory coming out of South America. Corn sales were split with 15.2 million bu (mbu) on old crop and 1.1 mbu of new crop. Soybean sales totaled 2.36 mbu old crop and 11.6 mbu new crop. Wheat bookings were divided with 8.8 mbu old crop and 13.7 mbu new crop. Even though total were down, all were above the volume needed to reach yearly USDA projections.

Beef and pork export sales for the week were mixed. Beef sales totaled 24,600 metric tons, a 57% increase from the week before. Half of the beef sales were split between South Korea and Japan. Pork sales were a negative 22,100 metric tons though as even though we did see sales, including to China, heavy cancellations from Mexico took place. This stemmed from a previous reporting error however, and was quickly looked over by trade.

One of the most questioned numbers in the global market right now is the size of the Brazilian corn crop which is currently predicted at 109 million metric tons (mmt). This ultimately hinges on the size of the Safrinha crop. Many analysts claim the crop will be smaller given recent weather and forecasts that indicate stress will continue. While yields may be down, Brazilian farmers are expanding plantings given record returns. Right now the break-even yield on corn in Brazil is 40 bushels per acre which has kept planting moving.

We are also seeing debate on the Argentine corn crop size. Harvest is slow to advance in Argentina, with just 14% of the crop out compared to last year’s 33%. Yields are better than expected though, causing some firms to increase their crop projections. One of the is the Buenos Aries Ag Exchange, who puts the crop at 46 mmt, up 1 mmt from their previous prediction. This is still 1.5 mmt under the latest USDA crop estimate.

The USDA attaché in Argentina has a different opinion on soybean production. That entity has lowered its crop forecast to 45 mmt as drought conditions persist. The attaché believes Argentina’s soybean production will rebound considerably next year though as weather returns to more normal patterns. It is also believed Argentina will seed 250,000 more acres to soybeans. It is believed this will produce a soybean crop between 51 and 52 mmt.

Basis values across the interior United States are running at firmer than normal levels. The current average spot basis values are a negative 11 cents on corn and a negative 44 cents on soybeans. We are also seeing better than normal new crop basis values as buyers want to secure coverage sooner than normal. The current average new crop corn basis is a negative 27 cents compared to a negative 34 cents a year ago. New crop soybean basis is now a negative 50 cents compared to last year’s negative 67 cents.

When it comes to feeding, one grain that is getting more attention is wheat usage. In the April balance sheets the USDA pegged wheat and residual demand on wheat at 100 mbu, a 25 mbu reduction from March. According to US feeders this number is too low. While an exact number has not been given, feeders claim they are using more wheat in rations, not less.

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, April 22nd, 2021

For the past week the global commodity market has focused heavily on weather conditions and outlooks. The most attention has been on cold temperatures in the United States and what impact they have had on planting. There have been several reports that it is too cold for corn to be planted, but given the dry conditions that are accompanying these temperatures, we are hearing several reports that crops are in fact going in. There are also beliefs that the current conditions will cause fields that were intended to be seeded to corn to shift to soybeans. Again, while possible, these seems a little premature at this time of the year. If we were thirty days from now and experiencing the same conditions acreage shifting would be more likely. What may be more of a factor for acreage are the reports of soybeans being seeded ahead of corn. We are seeing this in an effort to capture a portion of the market inverse of possible. Data also shows that in recent years early planted soybeans have yielded much better than later planted fields. This potential shift will undoubtedly be closely monitored over the next several weeks but remain unknown until the June acreage revisions are released.

Highlights

* China reportedly shopping for new crop coverage

* Corn, Soybeans, wheat setting new contract highs

* New crop contracts technically overbought

* US ethanol stocks decline for 9th straight week

* US equity markets becoming top heavy

* Brazil to increase commodity imports

* Large ranges in SAM crop estimates

* Positioning beginning for FND

* Concerns build over dry oils in WCB

* Lake Mead water level lowest since 1930’s

Corn

* No country movement

* Trade projects higher demand

* Some Brazil forecasts fall to 95 mmt

* Contracts setting new highs

* Risk premium providing support

Soybeans

* Processors bids are firming

* Chinese crush margins improving

* Global oilseed plantings to rise

* Soy oil leading complex

* Biodiesel production on the rise globally

Wheat

* Global production forecasts rising

* France ups production forecast

* France milling wheat rallies on weather losses

* Winter wheat crop stressed by cold temps

* Spring wheat acres may shift to corn/soybeans

Livestock

* Chinese packers pushing bids

* Cattle futures technically oversold

* Hogs technically overbought

* Cold storage report after the close

* April Cattle On Feed tomorrow

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, April 21st, 2021

Futures started today’s session on the positive side and after a brief set-back, rallied as the day progressed. Futures are approaching overbought and this limited fresh buying initially. Ongoing weather concerns in South America, sluggish planting reports from across the US, and an unwillingness to liquidate long positions gave futures their support. We are also seeing more positioning for first notice day on the May contracts where light deliveries are expected, if any.

Chinese officials have announced it will be shifting to feed rations in the country that will require even less corn. China is going to increase the volume of alternative feed grains to try and reduce costs for livestock feeders. In some cases this will reduce corn demand by 15% from current levels. By doing so China will increase its vegetable oil consumption to balance out energy needs in feed rations, giving the soy complex additional support.

Another source of support for the world vegetable oil market is the increase in biodiesel production. We have seen a considerable increase in global biodiesel production at the same time oilseed production has decreased. While we will see oilseed production rebound, in the meantime it is putting a strain on the world vegetable oil supply and pushing values higher.

The proposed shift in Chinese corn demand may not be that negative for overall corn demand. At the present time China imports roughly 175 million metric tons (mmt) of corn for feed. China is elevating its industrial use of corn though, mainly for ethanol, which is what has driven the corn market higher in the country. Even if we see a decrease in feed usage China will still need corn for other uses, and most of it will be imported.

US weather remains a primary factor in price discovery. The most impact now is coming from the unseasonably cold temperatures across the Corn Belt. Overnight lows are forecast to drop into the freezing range in several areas for the next 5 to 7 days. While the US corn crop is not far enough along for this to cause major issues, the cold temperatures could easily slow germination and development. The big question is if these conditions will cause a shift in acres.

Even though the Brazilian soybean harvest is winding down we continue to see a large range in production estimates. Some firms claim the crop is as small as 130 mmt, while others claim it will be closer to 135 mmt. While this seems like a small variance it will have a large impact on the global balance sheets as the United States continues to see its soybean reserves depleted.

This is also taking place in the Brazilian corn production estimates. Some firms claim Brazil will produce no more than 95 mmt of corn this year given ongoing weather issues in the country. Others, including the USDA and the official Brazilian estimate are at 109 mmt of corn production. These are based more on acreage than yield though, as farmers in Brazil are pushing plantings as far as they can. There are also thoughts the 3rd corn crop in Brazil may be larger than thought and make up for any loss in the Safrinha crop.

The global economy continues to rebound from the initial Covid 19 outbreak. Thoughts are this will continue, and as it does, support the commodity market. Economists predict the world commodity market will remain above 2020 for the rest of 2021, with Ag product values up 14% on the year. Several other products are also forecast to increase, including energy products, that will further support ag values.

Ethanol manufacturing data for the week ending April 16th was released today mostly as expected numbers. Production for the week totaled 6.59 million barrels, an equal amount to the previous week. Ethanol stocks dipped 71,000 barrels on the week, making it the 9th consecutive week of reduced inventory. US ethanol stocks now stand at 20.4 million barrels compared to last year’s 27.7 million barrels.

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, April 21st, 2021

Country movement of the remaining old crop inventory remains very light. This is not uncommon at this stage of the marketing year as all market interest shifts to spring fieldwork and planting. The majority of the movement taking place now is inventory that was forward contracted. We are also seeing interest in commercial movement as those entities are likely holding more free bushels than what is in farm storage. This light movement has been beneficial for interior basis values on both corn and soybeans. Average cash bids are currently 10-20 cents better on both commodities, even with today’s elevated futures. Even with this basis incentive very little selling is taking place. The next chance of increased country movement is likely to happen after the planting season is complete, and even then, it will depend upon crop development. The better crops look the more movement of remaining old crop bushels we typically see. Not only are buyers showing more interest in pushing old crop bids, but new crop as well. The primary reason for this is uncertain crop size and the need for bushels right out of the field next fall. Strong fall bids will also potentially reduce the volume of bushels placed in on-farm storage.

Highlights

* US planting winding up

* Country movement again slows

* Rebound expected to ethanol manufacturing

* Ethanol stocks forecast to decrease

* SAM yields vary greatly

* US processing margins remain positive

* Argentina unlikely to lower export taxes

* Concerns are building over dry US topsoil

* Some parts of US driest since 1988

* Trade closely monitoring unshipped US sales

Corn

* New crop sales total 82.7 mbu

* New crop demand is down 14% from last year

* Old crop sales 45 mbu from yearly projected total

* US has 1.1 bbu unshipped old crop sales

* US seeing record sorghum demand

Soybeans

* New crop sales at 193 mbu

* Forward contracting of soybeans +5.6% from last year

* Yearly crush up 36 mbu from last year

* US weather more favorable for soybean plantings

* China March soy imports from US 320% of last year

Wheat

* Unshipped wheat sales at 72.6 mbu

* Unshipped sales 17% higher than last year

* Germany ups production forecast

* Drought building in EU

* Chinese feeding is increasing

Livestock

* Breeding herd reduced in China

* High feed prices increasing Chinese slaughter

* US also seeing lower livestock numbers

* Cattle approaching seasonal highs

* Cash markets remain untested

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, April 20th, 2021

Considerable advances were again posted in today’s session with weather being the primary driver. While planting is progressing in the United States, we are seeing renewed concerns with the South American crops, mainly Brazil corn. News that Brazil will remove import tariffs on corn and soy products added to market strength. This was enough to make several new contract highs, especially in the deferred months. Positioning ahead of first notice day on the May contracts was also supportive today, as was a flash sale of 114,300 metric tons of corn to Mexico.

The Brazilian government announced today that it would be suspending its import tariff on corn through the end of the calendar year. This is being done to benefit Brazil’s corn processors and livestock feeders as domestic corn values in Brazil have rallied to record highs. Import tariffs will also be suspended on soy meal and oil to provide relief to feeders and biodiesel manufacturers.

While there is little doubt that simple demand is a primary reason for this change in Brazilian import policy, there may be another reason. Much of the corn that will be imported by Brazil will come from Argentina and Paraguay. This will be used in Southern Brazilian feedlots. While Brazil could move corn down from the north to these regions, it will take much less freight to simply import it, and make it more affordable for buyers.

Soybean consumption in the United States has shown no sign of slowing in spite of rationing attempts. According to data from Ag Resources, US soybean consumption for the marketing year currently totals 3.37 billion bu (bbu). This is a record pace and 35% greater than last year. It is also 11% more than the previous usage record. This demand shows no sign of slowing into next year either and will likely keep soybean reserves tight.

When it comes to US soybean usage most attention has fallen on exports, but just as much should be placed on domestic crush. Cumulative crush through March currently totals 1.3 bbu. This leaves just 900 million bu (mbu) of needed crushings through the end of August to meet the USDA yearly projection of 2.2 bbu. Crush will only need to average 150 mbu per month which should be easy to achieve. The unknown in this scenario is if elevated wheat feeding and distiller grain availability will reduce meal demand.

Trade is also debating corn ending stocks, with more of an emphasis on new crop balance sheets. There are models that indicate new crop corn carryout in the US will total 1 billion bu (bbu) at the current rate of old crop usage and potential for a smaller new crop production figure. The greatest unknown with new crop balance sheets is how much demand we may see if Brazil produces a smaller than expected crop and importers turn to the US for needs. This is already generating rationing in the corn complex.

There are several other factors that are currently impacting potential corn balance sheets, both domestically and globally. One is the use of alternative grains to displace corn in feed rations, mainly wheat and sorghum. We have seen an increase in demand for both of these recently and no sign of them decreasing. Any decline in feed may simply be negated by elevated ethanol manufacturing as that use is increasing around the world.

Trade seemed to pay little attention to the weekly planting report. Corn seeding came in at 8% and soybeans were at 3%. The corn number was right at the five-year average and soybeans were ahead of the normal rate. As always, trade believes planting is likely taking place at a faster rate than these numbers are indicating. The most concern will be if planting falls behind normal as that is when we tend to see elevated chances of acres being abandoned. While this is not likely to happen at this stage of the year, any threat of it will receive a market reaction.

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, April 19th, 2021

Trade started out the week on the positive side with weather being the primary catalyst for the rally. Concerns over cool temperatures in parts of the Corn Belt were a portion of this, but more importantly were the ongoing dry conditions in Brazil. Brazil is starting to enter its dry season and recent precipitation verifies the shift. With a portion of the crop entering the pollination stage this is a critical time frame. A six-week low in the US dollar also supported today’s commodity trade. Advances were held in check by overhead technical resistance and reports that planting is progressing around the US.

Concerns are building over the dry weather conditions in Brazil. An estimated 40-45% of the Brazilian Safrinha crop is suffering from abnormally dry conditions. Data also shows that 39% of the Safrinha crop has seen less than 25% of normal precipitation over the past 30 days. The most concern is in Southern Brazil where drought also impacted soybean production, which is not uncommon in a La Nina influenced year. The Safrinha crop is starting to pollinate in early planted fields, making dry conditions more of an issue for yields.

Export inspections for the week ending April 15th favored corn over soybeans and wheat. Corn inspections totaled 60 million bu (mbu). This was slightly less than a week ago, but just over the volume needed per week to reach yearly USDA projections. Of this total, 22 mbu was destined for China which gave the corn futures even more support. Soybean inspections totaled 6.7 mbu, down from last week’s 12.4 mbu, and only half the amount needed on a weekly basis. Wheat loadings reached 22.5 mbu, and while 5.6 mbu more than the previous week, it was 7 mbu under the needed amount.

We are starting to see a shift in market attention from soybean balance sheets to corn figures. Given the lower acreage numbers being predicted by the USDA and concerns over yields have some new crop carryout estimates down to 1.2 mbu. Even this may be too high if acres shift to soybeans as the market has indicated may happen. Some models indicate the new crop stocks to use ratio on corn could drop to 5% by the end of the 2021/22 marketing year. This possibility is keeping an elevated volume of risk premium in the corn market.

The US economy continues to improve as Covid restrictions are lifted, and as it does, travel is increasing. This obviously brings elevated energy product demand, including for ethanol. As a result US ethanol reserves are now just 75% of a year ago. We have to remember that ethanol stocks were rapidly building last year as travel restrictions were placed on US travelers. This is still the lowest US ethanol inventory since 2013 and is being closely monitored by trade. The most attention now is if ethanol plants can find enough corn to raise production and prevent further declines.

Soybean values continue be supported by soy oil, and more importantly, the entire vegetable oil complex. Soy oil from the United States is currently being offered at 60 cents per pound. While this is more costly than palm oil which is at 50 cents per pound, it is cheaper than sun seed oil offers at 75 cents per pound. This has kept buyers coming to the US, although we are now starting to see more pressure from South America.

The global wheat market is keeping a close eye on political developments in the Black Sea. Tension is building between Ukraine and Russia and has reached a point where global trade may be affected. This comes after Russia held navy maneuvers in the Black Sea. While not immediately threatening, this may prevent import and export vessels from moving into the region, and push more business to other commodity sources, including the United States. Even if ships do enter the Black Sea, they will likely carry a high freight cost given the potential for conflict.

Ukraine officials have revised their new crop grain production and export forecasts. Officials in Ukraine now estimate grain production of 73.6 million metric tons (mmt) this year, up 13% from last year. This is the result of improved weather conditions following last year’s drought. Corn production is forecast to total 35.7 mmt and wheat at 27.6 mmt. These higher production forecasts will elevate Ukraine exports as well.

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, April 16th, 2021

Futures were on both sides of unchanged today with grains under pressure and soybeans showing strength. The grains were pressured by technical resistance and overbought indicators. Higher than expected production forecasts also weighed on the grains, including the Argentine corn crop that was increased 1 million metric ton. Grains losses were limited by building political tensions in the Black Sea and how they could bring more buyers to the US. Soybean values remained firm with support coming from the ongoing rally in the global oilseed market and the need to ration US inventory.

Corn values have started to firm in China, which is supporting the global market. China has seen a considerable increase in wheat feeding recently and concerns grew that this was cutting into China’s milling wheat supply. As a result the Chinese government has established a floor price under wheat to keep feeding to lower quality inventory. This has pushed some feed demand back to corn and supported those values as well. Corn in China is now at a point where imports are likely to increase, and likely benefit the United States.

Trade is also questioning China’s soy meal demand. China has been feeding a large volume of wheat in rations which has a higher protein content than corn and is cutting down on the need for supplements. Current data out of China indicates meal demand is down from 7% to 9% from elevated wheat feeding. We are also seeing questions arise on total animal numbers in China on feed, despite reports that the country’s hog herd is quickly rebuilding.

Chinese hog numbers are again being reported and are higher than previously thought. According to the Chinese Bureau of Statistics, Chinese pork production in the 1st quarter was up 32% from the same period a year ago at 13.7 million tons. The group also put Chinese hog numbers at 416 million, 29.5% higher than a year ago, and up from the 406.5 million at the end of December. These numbers conflict with reports of ongoing hog losses in the country from ongoing African Swine Fever outbreaks.

Another region of the globe that is seeing elevated corn demand is Brazil. Brazil is starting to shift away from sugar and more towards corn as a raw stock for ethanol manufacturing. Corn based ethanol production has increased 58% in Brazil and now has a 9% market share. Volatility in sugar values and supply is leading the shift towards corn. This has started to put a strain on Brazil’s corn balance sheets though and is a leading reason why Brazil has exhausted its corn supply in recent years. Even with elevated production Brazil will have to reduce exports to maintain adequate domestic reserves.

A considerable amount of interest is being placed on what we will see for the planting pace in next Monday’s progress report. Last week’s report showed a 4% planting rate on corn, and even with less than ideal conditions this number is expected to increase. Farmers where conditions are dry are opting to move ahead with planting in anticipation of better conditions in the near future. As long as corn planting does not fall behind average it will be supportive.

Trade is also closely monitoring the US soybean planting pace. While the weekly numbers have not been released yet, a considerable amount of planting has been reported across the United States. We are also hearing reports of farmers going ahead with soybean planting ahead of corn which may be a reason for the lower than expected corn progress so far this year. This could easily give us a higher than expected soybean planting number to start the growing season.

Retail meat values in the United States continue to rally. US beef values in March were 107% of a year ago at a record $6.48 per pound. Pork values were 108% of a year ago and poultry was 4% higher than last March. These costs are fueling inflation worries in the United States.

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, April 15th, 2021

Futures were again higher to start today’s session with spot corn trading above $6.00 for the first time in eight years. Ongoing weather concerns in parts of the global market provided additional support. We did not see follow though buying on this move though which kept a lid on values during day trade. While current conditions are not conducive to US planting, next week we are expected to see a sizable jump in activity, even if temperatures remain cool. Low weekly export sales and building political tensions between the US and Russia also limited today’s trade, mainly in corn.

Export sales for the week ending April 8th were on the low side of expectations. Corn bookings only totaled 12.9 million bu (mbu) on old crop and 2.07 mbu for new crop. Soybean sales came in at 3.32 mbu old crop and 9.76 mbu new crop. Wheat sales had a net negative 2 mbu on old crop due to cancellations but new crop bookings came in at 10 mbu. The rally we have seen in futures and elevated competition from South America were the leading causes of the sluggish demand.

Meat sales for the week were also on the light side, especially for pork. Pork sales totaled 17,200 metric tons for the week, down 48% from the previous week and a marketing year low. Top buyers were Mexico and Japan. Trade was quick to note there were no sales to China. Beef sales totaled 15,700 metric tons, down 14% from the previous week. Japan was the top buyer, but we did see large sales to China as well.

The National Oilseed Processor Association (NOPA) crush report for March was not quite as friendly as trade had hoped for. Soybean crush for the month totaled 177.98 mbu, considerably higher than the February total, but just under trade estimates. Soy oil reserves held by NOPA members increased from February as well, coming in at 1.77 billion pounds compared to 1.75 billion in February. Meal exports were up in the month climbing from 837,800 tons in February to 937,000 tons in March.

The US planting pace is already becoming a market factor. As of last Sunday a reported 4% of the US corn crop had been seeded. While this was just under trade estimates, it was higher than the average pace for this time. While it is very early in the planting season and typically this would not receive much attention, any factor that may reduce the size of either corn or soybeans this year is receiving a reaction.

A bigger question is what impact the current planting pace and weather conditions may have on acreage. Historically if we see delays to corn plantings, we see acres shift to soybeans as that crop has a shorter growing season. This change can be heavily determined by futures spreads as well. The current spread between corn and soybeans is 2.5:1, which does not favor one crop or the other. The possibility of acres shifting will be debated right up to the official revisions on June 30th.

We are starting to see several comparisons between this marketing year and last, and higher commodity usage numbers as a result. While these numbers seem supportive, they are a bit misleading. Last year’s commodity demand at this time was being heavily impacted by Covid-19 restrictions and closures that impacted the US economy. The US ethanol industry is a perfect example of this and how production this year is much larger than last year. To get a more accurate reading on commodity usage we need to compare to 2019, which is inline with current ethanol manufacturing.

Another economy we are seeing recover from last year is in China. As a result, China is increasing its imports of grain, oilseeds, and meats. China is also seeing an increase in its exports, giving the indication the entire global economy is improving. While this news is positive for commodity demand, the recovery is also generating inflation worries, which may temper long-term demand. This is a fine line the global economy will face for the foreseeable future.

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, April 14th, 2021

Futures continued to strengthen today as fresh buying interest again surfaced in the market. Open interest increased in corn, soybeans, and wheat indicating new buyers had entered the market following the early week break in futures. This was most noted in new crop corn where another contract high was made. Global weather was also supportive today, mainly the cold temperatures in the United States and ongoing dry conditions in Brazil. Even with dry conditions in the US we are seeing planting take place which tempered strength. A general lack of fresh news was also a limiting factor.

Feed grain values in China have started to slip lower, putting pressure on the global market. While lower, corn in the country is still at $10.40 per bushel and soy meal is holding at $520.00 per ton, both of which are historically high values. China continues to make large imports of both of these commodities which is pressuring domestic values. This is being done in an effort to lower costs for Chinese feeders. There are also thoughts China is maintaining large imports to rebuild domestic reserves.

China continues to use a large volume of wheat in its feed rations, but this may soon change, which is also keeping corn and meal imports elevated. Chinese officials have announced they will be raising the floor value on domestic wheat reserve auctions in an effort to slow the use of high-quality reserves. China started these inventory auctions to try and benefit feeders, but there are now concerns it may be creating inflation in the country’s food costs. At the latest wheat auction just 12.8% of the volume offered was sold.

When it comes to the global wheat market, values are currently being driven by the Black Sea. The size of the Russian wheat crop has increase and is now thought to total 81 million metric tons (mmt). Ukraine has also indicated its wheat production this year will total 75 mmt compared to last year’s 65 mmt. The combination of these higher crop estimates will allow for elevated exports, likely at lower values than we are seeing now.

A split opinion is forming on the Brazilian crops. Harvest of Brazil’s soybean crop is in its later stages and more analysts are in agreement of a large crop. Just the opposite is happening on Brazil’s corn crop estimates though, with several being lowered recently. In the April WASDE report the USDA predicted a 109 mmt corn crop for Brazil, as have several others. We are also seeing crop estimates as low at 103 mmt though as ongoing dry conditions are impacting production. As with soybeans this will be debated well into the Safrinha harvest which is months away.

The corn situation in Brazil is gaining more attention as the country has fully depleted its current reserves. As a result Brazilian corn values have rallied to record levels. This has led Brazil to make corn imports, with news this week of two vessels have been booked from Argentina. Brazil may restrict its corn imports this coming year after putting itself in this position, especially with domestic demand continuing to rise in the country.

Ethanol manufacturing for the week ending April 9th was 3.5% less than the previous week when an increase in production had been expected. For the week US ethanol plants produced 6.6 million barrels of ethanol, 238,000 fewer than the week before. Ethanol stocks decreased 124,000 barrels on the week to a 20.5-million-barrel total. The is the lowest US ethanol inventory of the past five months and a large 7 million barrels fewer than a year ago.

After a brief reduction to processing, Brazilian beef packing plants are resuming operations. Cattle values in Brazil have recently risen 60% due to low inventory numbers and rising export demand. Same as with the United States, much of this demand was from China. Packing plants were only able to pass long a portion of this cost to consumers and opted to instead halt operations until profitability returned. Now that these plants are again functional it is starting to take business away from the US.

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.