News Source: SETZ

Closing Comments; Tuesday, November 17th, 2020

Soybeans were once again the leader of the market with sizable advances being posted in the complex today. Demand is one reason for this as both exports and domestic use continues to run at elevated levels. This shows the market that rationing has yet to affect buyer interest and more needs to be done. Data that shows funds have plenty of buying room left in their position added to today’s soybean strength, as did concerns over long-range weather outlooks in South America. Less interest was shown in the grains today, even though we did finally see a flash sale on corn as Mexico bought 195,000 metric tons.

The most interest in global balance sheets right now is on US soybeans. Even though just tightened, the US carryout figure on soybeans could easily contract even more. US soybean sales for export are already at 80% of marketing year expectations. This leaves less than 400 million bu of sales over the next ten months to reach the yearly projected 2.2 billion bu mark. Even if sales slow, this number is likely to be surpassed. It is not hard to justify a true ending stocks figure of less than 100 million bu in this scenario.

Not only has demand for US soybeans been high in recent months, but so has demand for soy oil. Other oil seed products around the world are in short supply, mainly palm oil. The United States is also seeing less competition from canola oil as Canada is shipping more whole canola than product. The greatest benefit for soy oil is the concern over the Argentine soybean crop as loss predictions build in that country.

The bottom line in today’s market environment is that is favors sellers over buyers. This starts with the US farmer and how they are in no need of making additional commodity sales to generate cash flow. Large sales took place right at harvest and this generated enough cash flow for many to last until later in the year. In addition to these sales, many have received enough government payments to further restrict cash selling.

South American weather forecasts indicate dry conditions will likely persist into the end of the month. Current models indicate 62% of Brazil will remain dry over the next two weeks. The same outlooks expect 76% of Argentina to be dry into month end. A good portion of these two countries are expected to see less than half of their normal rainfall over this period, intensifying drought conditions.

Most of the attention on South American production loss has been on soybeans and corn, but more is starting to develop on wheat. Argentine wheat production has been hit hard with drought this year and analysts now believe the crop will only total 16.7 million metric tons. If correct, this would be the smallest Argentine wheat crop in five years. This loss is being overshadowed by the record large Australian wheat crop that is supplying a large share of the global needs. Trade is also expecting a large wheat crop out of the United States next year and EU officials believe their wheat plantings will increase 9% which may keep the global supply steady.

More estimates are being released for what next year’s plantings in the United States may total. Estimates indicate US farmers will plant 92 million acres of corn next spring, 1 million more than this year. Soybean acres are predicted to reach 89 million, a 6 million increase. Wheat plantings are expected to total 46 million acres, a 1.7-million-acre increase. The question is if even with these elevated plantings if production will satisfy demand.

China continues to rebuild its hog herd following the outbreak of African Swine Fever. Data shows that during the month of October China had an increase in its hog inventory of 27% from October 2019. China’s sow herd showed an increase of 31.5% which indicates we will see numbers start to rise even faster in future months. A result of this build in inventory is declining pork values in China. This decrease is lowering the level at which Chinese importers are willing to make purchases, pressuring the global hog market.

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, November 17th, 2020

Trade is now starting to focus more on the global production numbers that are being released as large crops of corn and soybeans out of South America will be critical in maintaining adequate commodity reserves. While analysts in South America are holding to large crop expectations, there is little if any room for loss. The most attention is on Brazil where expansion may be needed to make this happen. Sources in Brazil claim the soybean crop will still total 135 million metric tons, even with losses in some regions of the country. If we start to see this number decrease the futures market will react accordingly. The same is true on corn where Brazil is predicting a 105 million metric tons crop. Not only will we need to see large crops in South America this year but in the United States next year to rebuild commodity reserves. Economists claim an additional 10 million acres of US plantings will be needed next year from this year with the most going to soybeans. While this is possible, we need to question where the additional acres will be found. Most likely we will see marginal CRP acres exit the program, and while these may increase plantings, their ability to produce sizable crops is questioned.

Highlights

* US corn harvest 95%, soybeans 96%

* NOPA crush a record 185.25 mbu

* Trade volume decreasing, volatility building

* Funds add to long positions

* Covid restrictions building

* La Nina continues to build

* La Nina likely until February

* Buyers continue to surface on breaks

* New crop acreage debate increases

Corn

* Higher Brazil exports in November

* Official Chinese import figure remains under others

* Processing margins under pressure

* Gulf basis continues to soften

* EU imports rising

Soybeans

* Chinese buying has slowed

* China predicts 95 mmt imports for the year

* US production likely to decrease further

* Brazil ups November export forecast

* China may use reserves to avoid imports

Wheat

* Winter wheat 96% planted

* winter wheat 85% emerged

* Crop rating improves to 46% G/E

* Australia crop at 28 mmt

* China predicts larger crop than USDA estimates

Livestock

* Cash cattle lead futures

* Feed cattle $16.00 premium to fat

* Funds add to livestock longs

* Market counting on high holiday demand

* Countries to start testing meat imports for Covid

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.

Closing Comments; Monday, November 16th, 2020

Trade was mixed to start the week with corn and soybeans on the positive side and wheat under pressure. Corn and soybeans took support from ongoing weather concerns in South America, although we did see weekend rains in several production areas. Much more is needed and trade remains skeptic over how much will be received in regions of South America that need it the most. All contracts retreated at mid-session as rumors of large Chinese purchases were not confirmed in the daily flash report. In fact, no sales were listed at all. The market is starting to run out of fresh fundamental news which also capped daily advances. We are seeing buyers surface on breaks though, which offered support into the close.

Cash values of US soybeans and corn continue to run at historically high values. The current average US corn basis is 22 under December futures. This is the best cash basis we have seen on corn in the past seven years. The average soybean basis in the US is 43 cents under January futures, which is also the best basis in the past seven years. We have started to see more volatility in basis values though as even where coverage is needed, buyers are weighing their margins when posting bids.

France was listed as a buyer of US corn in last week’s sales report which is highly unusual and caught the market by surprise. US corn into France is currently not economical given the 25% import duty. There are also GMO regulations in the EU that do not favor US imports. France only bought a small amount of corn though, and thoughts are this was done to test the process in case larger purchases are needed later on.

While the recent rally in futures has been welcomed by many in the cash grain industry, it has caused economic issues for buyers and processors, mainly in feed. Many traditional corn buyers around the global market have now started to opt for cheaper feed grains. The main one of these is China who is now reportedly considering releasing government stored inventory into the domestic market to offset high import prices. This is starting to temper the global feed grain market rally, even with tightening supplies of corn.

Trade is keeping a close eye on global wheat values. The Black Sea market has been driving global wheat values, especially when it has come to sales into Asia. Australia has started to export its excess supply though which is considerably larger than in recent years. Right now, Australia is selling wheat into Asia at a $10.00 per metric ton discount to Black Sea sources. In turn, this is driving down the entire world wheat market.

Even with recent drought, not many analysts are backing off on their Brazilian corn crop estimates. The latest CONAB estimate was for 105 million metric tons of corn production, but private firms are putting the crop closer to 107 mmt, even with less than ideal weather. This is from an expansion to corn plantings which is expected to reach 48 million total acres. This would be a 5% increase from last year.

Export inspections for the week ending November 12th were released today with favorable numbers. Corn inspections came out at 32.2 million bu and wheat was at 12 million bu, both of which were above last week’s totals. Soybean inspections were down on the week but still quite high at 82.3 million bu. The grains fell short of what is needed to reach yearly projections on a weekly basis though, while soybeans were well above the needed amount.

The National Oilseed Processor Association, or NOPA, soybean crush report for October was released today with a record usage number. For the month, NOPA members processed 185.25 million bu, well above the previous record 181.37 million bu set last March. Crush usually increases in October as new crop soybeans become available. Soy oil stocks at the end of the month were about as expected with 1.45 billion pounds. Meal exports in October decreased from September though to total 945,835 tons.

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, November 16th, 2020

Now that the initial shock of the November WASDE report has worn off, trade is starting to look forward to the next data release in December. Typically the December release receives little attention as only demand is altered in that data. This December update is likely to receive more attention though as US ending stocks were reduced more than expected in the November report. The most attention will fall on soybeans as ending stocks are already at a minimal level and any alteration to demand to cause a further reduction will be met with additional price rationing. There are doubts over how much of a reduction will be seen, if any, as the USDA tends to keep ending stocks are a minimal level even if demand indicates otherwise. We may see more changes to the corn balance sheets as the ending stocks on that grain are more adequate, as is the level on wheat. Trade may look past the December release and focus on the January numbers though as that report will give us the final production changes for the remainder of the marketing year. Trade will again monitor soybeans demand this week for signs of rationing taking place. We will also closely monitor South American weather as rains are in need for many areas.

Highlights

* This week’s weather critical for SAM

* Low water levels causing some logistic issues in US

* Lack of freezing is a benefit for barge movement

* Large volume of fall fertilizer being applied

* China enters new trade pact with other Asian countries

* Brazilian inflation impacts commodity markets

* Ethanol production at highest level since Covid outbreak began

* Concerns build over new closures due to Covid

* Shut downs will alter commodity demand

Corn

* Average US corn basis -22 Dec futures

* Drought slows Argentine planting

* Argentine planting 10% behind normal

* Window for US sales widens

* Funds not buying corn

Soybeans

* NOPA crush estimate at 177 mbu

* Crush would be record for October

* Global market needs large SAM crop

* Slow germination in Brazil a concern

* Average US basis -43 Nov futures

Wheat

* Buyers show restraint in purchases

* Nearly all buyers going to Australia

* Russian exports likely higher than thought

* Low US wheat rating a concern

* Argentine crop to be smallest in 5 years

Livestock

* Cash cattle driving futures

* Feeder cattle rally more than fats

* High feed costs weigh on margins

* Low livestock margins a global issue

* Rising meat cost to limit demand

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.

Closing Comments; Friday, November 13th, 2020

Grains managed to stabilize today as selling came to an end. Funds have trimmed their weak long contracts which was a primary reason for yesterday’s declines. Soybeans posted a recovery today after yesterday’s sell-off which also lent support to the grains. Trade is starting to search for fresh news which limited all advances while ongoing weather concerns in South America provided support. Buyers did surface late in the session in all contracts in an effort to put some risk premium into futures.

A benefit for the commodity market is coming from the energy sector and a leveling out of product demand. Energy analysts claim gasoline demand in the United States is holding at 85% to 90% of what it was prior to the Covid-19 shut-downs in the US. While a decline, this is better than what was seen just a few months ago. In turn this has elevated demand for renewable fuel usage as well.

We are now starting to see foreign countries push back on US tariffs. The main one of these is the EU who strongly opposes the tariffs that were just placed on their US exports. Another is China who is expected to try and renegotiate its current plan that kept the trade war with the US from escalating. These changes come from the expected change in the US administration following the first of the year.

Even with less than ideal weather, Brazilian firms are holding to their large crop estimates. More interest in this is being placed on soybeans, but we are now seeing more interest on corn, mainly the Safrinha crop. A slight reduction is expected to Brazil’s first corn crop from drought but sources in Brazil expect weather conditions to improve enough to see limited impact on the Safrinha production. Brazil can also expand its third corn crop which is mostly grown in northern areas if need be, as that is where drought has been less stressful.

The greatest unknown when it comes to the global corn balance sheets is in Ukraine. The USDA lowered the Ukraine corn crop by 25% in this week’s balance sheets and indicated it may go lower. The uncertainty with Ukraine corn is that farmers in the country are going to let some fields sit until next spring to be harvested due to wet conditions. This means the country’s corn output will not be truly known until then. This also opens the door for elevated US demand through the winter months.

It is no surprise that since the bullish data was released by the USDA this week, we have seen even less interest in cash sales. We did see an immediate bump in selling interest, but this ended quickly. We are also seeing carry build back in the grains, giving farmers even less incentive to market inventory into the spot market. This could easily open a window of opportunity for quick delivery sales in the near future.

We are starting to see more of a disconnect in the market between cash and futures. In areas where country movement of inventory has been greater, we are seeing basis values fade as buyers are comfortable with reserves. This is especially the case in regions where processing margins in local markets are being pressured. In others we are seeing basis values rally to encourage movement, even with elevated futures values. This makes it more important for a seller to monitor local cash bids rather than futures movement.

Export sales for the week ending November 5th were mixed. Corn sales were under trade estimates and the volume that is needed per week to reach the yearly projected total with 38.5 million bu. Wheat sales came in at the low end of estimates with 11 million bu. Soybean sales were above estimates with 54 million bu.

Weekly beef sales for the 2020 year were down 30% from last week at 14,300 metric tons. Beef sales for 2021 were also light at 3,300 mt. Weekly pork sales were down a slight 1% and totaled 42,500 mt for 2020. Pork sales for 2021 were a strong 16,100 mt. China was again listed as a primary buyer for both pork and beef.

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, November 13th, 2020

While it seems early, trade will soon start to shift its attitude into a holiday mindset. In many years this starts just before the Thanksgiving Holiday and lasts through the end of the year. To see reduced trade volume during this time span is not uncommon. This does not necessarily mean a reduction in trade volatility though, and in fact, it tends to increase. We will also start to see positioning for year end over the next several weeks. Funds continue to hold sizable long positions in commodities so to see liquidation would not come as a surprise. One difference this year is the global outlook on commodities, especially in soybeans, where stocks are tightening. Long speculators may be more willing to hold their positions over year end as a result. Trade will continue to monitor South American weather on a daily basis, especially as we approach the harvest season. While planting is still taking place in Brazil, harvest of the initial crops will begin in another few weeks. The real question is if farmers will plant as many double cropped acres if dry conditions persist. To see a scaling back on intended double cropping would not be surprising if conditions persist.

Highlights

* US needs an additional 10 million harvested acres next year

* Soybeans will need majority of additional acres

* Rising Covid cases remains a major concern for markets

* US ethanol stocks, now near year ago

* Brazil rains critical next week

* Germination a concern on planted crops

* Officials still not lowering Brazil crops

* Interior basis remains historically tight

* Gulf basis weaker

Corn

* US corn loadings +127 mbu year ago

* Large application of fall fertilizer noted

* Active fall tillage tends to favor corn planting

* Minimal losses in China from typhons

* Spot export basis is weak

Soybeans

* Very little crop left to market

* South American production estimates questioned

* Global rationing needed

* US ending stocks tightest since 2013/14

* Average cash value then was $13.00

Wheat

* Global wheat supply adequate

* More buyers shift to Australia for needs

* Global wheat feeding on the rise

* EU to increase wheat plantings 9%

* China to elevate wheat plantings as well

Livestock

* Chinese pork values decline in October

* 1st decline to Chinese pork in 19 months

* Grains rally weighs on feeder markets

* US beef production in 2020 to increase 85 mil pounds

* US pork production in 2020 to decrease 25 million pounds

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.

Closing Comments; Thursday, November 12th, 2020

Soybeans and grains were under pressure today as funds took profit on recently established long positions. Trade volume was heavy today, but fresh news was limited, and this added to the weaker futures. The most interest in the market remains the tight balance sheet forecast on soybeans and if we have already seen rationing develop. South American weather remains a driving force as well, and outlooks are mixed for much of South America. Rains are in several forecasts but the amount of precipitation that will be received is mixed and unlikely to alleviate drought conditions. Concerns that Covid will cause a loss of commodity demand before a vaccine can be distributed weighed on futures as well.

Harvest is just wrapping up across the United States, but farmers have already marketed a large share of their new crop bushels. This is especially the case on soybeans where an estimated 75% of the US crop has been marketed. On corn and estimated 50% of newly harvested bushels have already been marketed. Much of this selling was done prior to harvest taking place. The question now is when the remaining bushels will be sold, and the likelihood of this happening anytime soon is low.

Now that harvest is wrapping up, we are starting to see elevated interest in next year’s crops, and along with it, potential market returns. Economists are starting to predict higher fertilizer values for the next crop cycle as more acres are expected to be seeded to corn and soybeans. There is also a belief that farmers will spend more on inputs as they have adequate cash from both commodity values and government payments from the previous crop. It is also believed that energy costs will be down next year, offsetting much of the higher fertilizer cost.

We are also seeing more interest on the South American crops and what their total production will be. One beneficial factor for Brazil is that recent expansion to crop production has been in regions where more favorable weather has been taking place. This may limit crop loss in the country. As a result, forecasters are keeping Brazilian crop sizes and in turn exports at high levels. There is less optimism on the Argentine crops where more of the country is being impacted by drought conditions.

What is becoming more of a concern on the South American crops is the slow development of already planted fields. Reports from Brazil indicate some soybeans that were planted over a month ago have yet to germinate. If this lingers it will push development back all year and could impact final yields. This may also reduce the window to seed the Safrinha crop as well.

Ethanol manufacturing data for the week ending November 6th was released today with mixed numbers. Production for the week totaled 6.84 million barrels, a 112,000-barrel increase from the previous week. This was still a 5% reduction on the year. Ethanol stocks increased a sizable 484,000 barrels and now stands at 20.16 million. This is just under last year’s 21-million-barrel inventory.

Trade is starting to pay more attention to Chinese pork demand. China was a huge buyer of US pork to start the calendar year but has decreased since. Of the US revenue generated by pork sales to start the year 25% came from China. By September China’s share of revenue generation was down to 4%. This same trend has taken place in beef. China is buying less meat from the US as its domestic production has been rebuilding.

The primary reason for the decline in Chinese pork buying is the rebuilding of its domestic supply. China has seen a steady increase to its pork production in recent months which is not only reducing its need for imports, but also weighing on its domestic values. Pork values in China declined in October making it the first month of price contraction in nineteen months. China’s domestic pork market is now under the global market and making imports from any source uneconomical.

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, November 12th, 2020

Now that trade has time to digest the monthly WASDE report we will start to see attention shift back to other fundamentals for price discovery, with South American production being a key one. While planting has progressed in South America, weather conditions remain less than ideal. The greatest concern is the ongoing drought conditions in Southern Brazil and Argentina from the La Nina event. Forecasts indicate this event will remain in place through the end of the year which will start to impact yields even more. The question is how much this will impact production at a time when South America has already depleted much of its corn and soybean reserves. This means not only do these countries need to produce large enough crops to satisfy export demand but to build cushions for domestic needs as well. This will likely keep buyers coming to the US for needs as well. The commodity being monitored the most in this development is soybeans. US soybean ending stocks are already expected to drop to a minimal level this year and any additional demand could cause shortages. As a result, price rationing has already developed in the market.

Highlights

* US harvest most complete, pressure has lifted

* Russia may limit grain exports

* Russian limits not that large, may not matter

* Covid vaccine news continues to offer support

* Energy market supports renewable fuels

* Commodity spreads widen back out

* Gulf basis weakens

* Global market needs large SAM crops

* Open Interest indicates fresh buying

Corn

* Lack of competition benefits US exports

* Starting to see new crop demand

* US has 29.4 mbu sales for 21/22

* Technical buying stalls in corn

* Feed demand remains questionable

Soybeans

* Brazil expected to import 1 mmt this year

* Analysts doubt reductions to Brazil exports

* Argentine planting half of normal pace

* Brazil planting at normal pace

* Emergence now a concern in SAM

Wheat

* Wheat at highest values since February 2019

* US over-priced in global market

* Australia undercuts global market

* 1st time market favors Australia in 4 years

* Russian export limits a non-event

Livestock

* Boxed beef values become mixed

* Hog slaughter equal to last year

* Cattle slaughter just under last year

* Trade remains concerned with economy

* Mexico ups US meat imports

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.

Closing Comments; Wednesday, November 11th, 2020

Futures were mixed for much of today’s session with soybeans on the plus side and the grains under pressure. Much of the bullish news in yesterday’s balance sheet update favored soybeans which took the steam out of the grain rally. All contracts were pressured by improved weather conditions in South America and thoughts that even with supportive fundamental news the market is becoming technically overbought. It is also possible that with the recent run-up in futures farmers in Brazil will expand plantings helping ease the global balance sheet worries.

Trade is still sifting through yesterday’s balance sheets, with most interest on the demand side changes, or the lack thereof. This is especially the case on soybeans where US exports were not altered despite recent sales. The main reason for this is that soybean ending stocks are already at a minimal level and rationing will prevent them from dropping further. There are also thoughts that if soybeans rally further buyers may resell bookings, dampening demand.

The same questions are being asked on corn. The USDA made its largest cut to US corn stocks in November in 21 years yesterday, but thoughts are reductions should have been even larger. The USDA only increased China’s corn imports to 13 mmt, much less than the Chinese attache has indicated their imports will actually be. Given the lack of competition the US is likely to see elevated demand for the next several months. The unknown in this is if China has enough corn until other sources will be able to make exports, mainly South America.

Brazilian farmers have already sold a large 56% of their soybean crop that is still being planted. Typically by this time of the marketing year sales are only 35% of intended crop size. Record returns have prompted these early and large sales. That said, sales have slowed considerably in recent weeks as farmers want to weigh production potential versus existing coverage. As anywhere else, farmers in Brazil also want to hold out for even higher values if possible.

Much of the recent strength we have seen in futures recently has been from weather and production issues around the world. Demand for US commodities has also been supportive, especially for soybeans. An underlying source of support has been fund buying though, and this activity has stalled in recent sessions. In fact, funds have actually started to reduce their long position in the grains. If this builds it will pressure futures, even if we do see supportive fundamentals.

An indication of how tight the soybean supply is in Brazil came earlier this week the country announced it would be altering its GMO soybean policy to align with that of the United States. What this means is if GMO soybeans are approved in the United States, they will be in Brazil as well. What this does is make it easier for Brazil to import US soybeans if need be. This does not mean Brazil will import a large volume of US soybeans but makes it easier to do so if needed.

One source of support the United States continues to see is minimal grain sales out of Ukraine. Total grain sales out of Ukraine are down 14.5% from a year ago. The greatest decrease remains in corn, where sales only total 2.8 mmt this year compared to 4.57 mmt a year ago. While this has benefited US corn sales into Asia, we have seen more feeders shift to wheat over corn, which is tempering price potential.

Once again, the Russian government has indicated it will limit grain exports. Russian authorities have stated they will limit grain exports in the last third of the year to 15 million metric tons to ensure adequate domestic supplies, which is not a substantial reduction. This also does not mean Russia will not make exports, especially on wheat. What may be more of a factor for Russian exports is elevated competition from Australia in the global market, as buyers have started to source more coverage from there than Russia given the wide price spread between the two.

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, November 11th, 2020

There is little doubt we will continue to see a reaction to yesterday’s WASDE report in today’s session. The most interest is on domestic ending stocks which dropped to minimal levels, especially on soybeans. This gave the market a bullish reaction yesterday and that momentum is expected to carry over into today’s trade as well. Now that the monthly balance sheets data has been released, trade will again focus its attention on South American weather and production and what to expect for next year’s acreage in the US. When it comes to South America, all interest is on the dry conditions in Southern Brazil and Argentina. There is little doubt this will reduce the output from that region even if rains do develop. Trade is also more closely monitoring Chinese demand. Now that it appears Joe Biden will become the next president of the United States there are thoughts China will want to renegotiate its trade deal with the United States. This is a topic that is not limited to China, as several countries are wondering if trade relations will be changed with a new administration after the first of the year. While not a given, it would not be surprising to see buyers only secure immediate needs until that time when policies will be better known.

Highlights

* Stocks to use now 4.2% on soybeans, 11.5% on corn

* Average cash price projection $4.00 corn, $10.40 soybeans

* Futures will start to ration soybean supply

* Buyers may re-sell soybeans if economical

* Brazil soy planting now ahead of normal

* US farmer 50% sold on corn

* Soybeans 75% sold

* Interior basis becomes volatile

* Ethanol demand has stabilized

Corn

* US corn yield at 175.8 bpa, crop at 14.5 bbu

* US corn crop 3rd largest in history

* US ending stocks at 1.7 bbu

* 20/21 world ending stocks 291.4 mmt

* US exports a record 2.65 bbu

Soybeans

* US yield estimate 50.7 bpa, crop at 4.17 bbu

* Crop is 4th largest in history

* US ending stocks est 190 mbu

* Carryout tightest since 97 mbu in 13/14

* 20/21 world carryout 86.5 mmt

Wheat

* US ending stocks 877 mbu

* Ending stocks tightest since 752 mbu in 14/15

* World stocks at 320.5 mmt

* US becoming overpriced in global market

* Buyers continue to shop for feed wheat

Livestock

* 2020 US beef production 27.22 bil pounds

* 2021 beef production 27.37 bil pounds

* 2020 pork production 28.2 bil pounds

* 2021 pork production 28.5 bil pounds

* Economy questions weigh on demand

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.

Closing Comments; Tuesday, November 3rd, 2020

All eyes in today’s trade were focused on election updates and developments. This caused the equity markets to firm as selling has been taking place up to this point, causing speculative bottom-picking to develop. The US dollar collapsed at the same time, enticing even more buying interest in commodities. The US harvest is winding down and will likely be complete in another week which is giving the cash market strength as buyers now need to push for deliveries. Elevated domestic usage numbers added to the market strength.

The Census soybean crush data for September has been released with a record volume of soybeans being used. For the month US crushers consumed 171.03 million bu of soybeans, the most ever for the month. This total was in line with most pre-report estimates but was still enough to give the soy complex support.

One factor that was noted in the monthly crush data was lower yields on meal and oil. Monthly yields averaged 11.5 pounds of oil and 43.9 pounds of meal per bushel. These are just slightly under what we have been seeing but brings into question the overall quality of this year’s soybean crop. They also generate ideas that crush could be higher this year to produce enough products, further reducing ending stocks.

According to Census data, the United States produced 28.42 million barrels of ethanol in the month of August. This was a 12-million-barrel reduction from July and 11% less than a year ago. Ethanol exports during the month totaled 2.4 million barrels which was a 4-month high. Ethanol stocks at the end of August totaled 20.14 million barrels. For biodiesel, the United States produced 163 million gallons for the month.

Ukraine corn sales have started to increase in recent weeks as the global market appreciates in value. Sources in Ukraine now claim corn sales are at 816,000 metric tons. While this is much less than a year ago it is double what the country had sold just a few weeks ago. The reason for the surge in demand has been from buyers wanting to spread out their purchases rather than having all needs booked from two sources, mainly the US and South America. The main one of these is China, who is taking this step on all imports.

This change in China’s buying is being confirmed by the state group Sinograin who books imports for Chinese storage. Sinograin is now booking soybeans from Argentina for import for next year. Typically Argentina sells more soy products for export than raw soybeans, so this move verifies China’s intent to limit its risk in the global import market.

We are starting to see private forecasters alter their crop estimates for Brazil. Surprisingly, some are raising crop sizes, even with the delayed start to soybean planting and mixed weather conditions. There are now thoughts we could see a Brazilian corn crop of 116 million metric tons, 15 million more than what was produced this year. The country’s soybean crop is pegged at 133.5 million metric tons, up 12 million on the year. These are also larger than earlier estimates from private forecasters.

One reason for the higher crop estimates in Brazil is yield, but elevated plantings are also a factor. Record corn and soybean values in Brazil have encouraged farmers to expand plantings. The question is if these crops, if achieved, will lead to elevated exports. It is quite possible that Brazil may be hesitant to export as much as they did this year given the fact they keep overextending their sales.

The October Fall Harvest Option crop insurance values have been released. For soybeans this value is $10.55 per bushel, the highest fall value since 2013. On corn the fall option value is $3.99 per bushel. This is also the highest since 2013, and for the first time since 2012 the fall value is above the spring value.

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, November 3rd, 2020

As expected, the US harvest is now in its later stages. As of Sunday, 82% of the corn and 87% of soybeans had been harvested. Winter wheat planting advanced as well, with 89% of projected acres now seeded. Nearly all attention in trade today will be on election developments. The possibility of a change in the US administration can keep traders on edge as it brings uncertainty over future global relations. Not only does this affect the commodity markets but all markets, including energies and equities. We will also see continued attention on South American production, mainly in Brazil. Soybean planting has been active over the past week and thoughts are we may see the rate catch up to normal. While still possible, this does not mean we will not see a delay to the start of the Brazilian harvest. While this may extend the window for US exports the question is how far. Trade seems to have dialed in another four weeks of soybean demand until the next Brazilian soybeans crop will be ready. Sources in Brazil claim the gap will be much less given the rapid advancement of plantings and may be less than a week, generating little added demand for the US.

Highlights

* Election developments

* Harvest winding down in US

* Uncertainty in global economy

* Chinese demand is slowing

* Argentine government forces end to soy crush strike

* Sep soy crush a record 171.03 mbu

* August ethanol production at 28.42 million barrels

* August biodiesel production 163 million gallons

* One week from Nov WASDE report

Corn

* Crop is 82% harvested

* Ukraine may increase corn plantings

* US remains top choice for those needing coverage

* Gulf basis weaker

* Energy demand pressures ethanol demand

Soybeans

* Crop is 87% harvested

* Buyers report having winter needs covered

* India to increase production

* China looks for alternative to US/Brazil supplies

* Census crush shows smaller meal/oil yields

Wheat

* Winter wheat 89% planted, 71% emerged

* Winter wheat 43% G/E, +2%

* China releases wheat for feed use

* Analysts hold winter wheat acres at 31 million

* Global wheat production to rise

Livestock

* Yearly beef exports at 666,500 mt

* Beef exports +1.5% year ago

* Yearly pork exports at 1.56 mmt

* Pork exports +25% year ago

* 38% of US pork to China

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.

Closing Comments; Monday, November 2nd, 2020

Trade was mixed for much of today’s session with futures seeing both sides of unchanged. A primary reason for this was new moth positioning, but also last minute squaring ahead of tomorrow’s Presidential election in the US. Trade is not just preparing for the election itself, but the possibility we may not know the outcome for several days or weeks. Soybeans felt additional pressure from more favorable long-range weather outlooks for South America as some are calling for upwards of five inches of rainfall for Brazil. We did see a flash sale on corn of 204,000 metric tons to an unknown, but again nothing to China. Wheat futures were able to separate themselves and rally today as funds favored that commodity over the others.

We have seen a sizable advancement in Brazilian soybean planting in the past week. While the overall planting pace is still behind normal it is not as great as it once was. Sources in Brazil now claim this year’s harvest will not be delayed a significant amount either. In fact most claim the Brazilian harvest will be less than a week later than usual. This means Brazilian soybeans could be ready for export by early February which is how long many buyers claim to have coverage already on the books with the US.

So far this marketing year the United States has sold 1.73 billion bu of soybeans for export. A year ago this total was only 704 million bu at this time. One concern with this volume is the number of unshipped bushels to China and unknown buyers that total 956 million bu. The worry with these is that we may see cancellations as the year progresses, especially if the South American crop is as large as some predict.

The real question is how these sales may be accounted for in next week’s WASDE data. The current carryout estimate on soybeans is 290 million bu and thoughts are the number will shrink even more. The question is how quick the USDA may be to adjust their ending stocks. Even in years with demand such as we are seeing the USDA is slow to make big reductions to ending stocks as they believe rationing will take place as the year progresses.

Not only are soybean sales up on the year, but so are corn bookings. The US currently has 1.2 billion bu of corn sales on the books, up from last year’s 450 million bu. Thoughts are we may see corn exports raised 50 million bu in the November supply and demand report, but that is unlikely to change the outlook of the market very much as carryout would still hold above 2 billion bu. More support is likely to come from the global side of balance sheets if production is cut as much as the International Grains Council has indicated.

The current market remains void of nearly any risk premium which is starting to be noticed, especially in the soy complex. Risk premium is the act of taking a position in a market in case of an adverse event and is typically associated with weather. There are other cases too, with one being the potential of depleting a commodity reserve. Some economists believe this should currently be happening in the US soy complex as ending stocks could reach historically low levels this year. The reason we are not seeing much risk premium is the forecast for a large soybean crop in Brazil. If that crop starts to see trouble, we will likely see the market react accordingly.

Export inspections for the week ending October 29th were mixed. Corn inspections for the week came in at 28.4 million bu and wheat was at 10.5 million bu, both of which were under the needed amount per week to reach yearly projected totals. Soybean inspections were much higher totaling 76.5 million bu. This was twice the needed amount on a weekly basis. This high soybean number was welcomed by trade as it lessens the chance of cancellations once the South American crop becomes available.

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, November 2nd, 2020

Much of today’s session will be spent getting new month positions in place. We will also see an increase in positioning ahead of tomorrow’s election. Not only is this going to impact trade today and tomorrow, but possibly for the next several weeks and possibly months depending upon the results. Now that the calendar has turned to November, we will also start to see more positioning for the monthly WASDE report. Ahead of this release will see several analysts publish their estimates. For the most part we are hearing estimates for reductions to ending stocks on both corn and soybeans. This is all from elevated demand, especially on the export side. Domestic usage of corn and soybeans is a little more debatable and may hold steady this month. One unknown is what will be done with production. Harvest is now in its later stages and trade has a better idea of crop sizes, even with some uncertainty. It is not out of the question we could see enough of an increase in production offset much of the elevation in demand. Trade is most focused on the soybean balance sheets where the possibility of a sub-200 million bu carryout is rising. Trade is much less focused on wheat balance sheets as global production is higher on that crop, even with some losses.

Highlights

* More countries indicate lock-downs due to Covid

* World cases rise at rapid pace

* Covid impact to be long lasting

* Trade believes US exports currently underestimated

* USDA hesitant to raise Chinese demand estimates

* Future ethanol demand questioned

* US harvest winding down

* Presidential Election tomorrow

* Markets concerned with delay to results

Corn

* Yearly export loadings at 240 mbu

* Inspections +82 mbu a year ago

* Buyers now shopping for optional origin corn

* US corn remains competitive in global market

* Brazil corn at record values

Soybeans

* Soybean shipments a record 527 mbu

* Concerns build over low soybean moisture

* Global oilseed market drives soybeans

* EU soybean imports rising

* Census crush today estimated at 171.3 mbu

Wheat

* Rating improvement expected tonight

* Initial rating was lowest on record

* Export loadings slowing

* Russian grain mostly planted

* Ukraine winter wheat planting -9% this year

Livestock

* Cash cattle trade thin

* Consumer spending is questioned

* Chinese imports slowing

* Chinese imports still expected through 2025

* Global beef demand eases

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.

Closing Comments; Friday, October 30th, 2020

Trade started out the last day of the month firm but was mixed by mid-session. The majority of the session was spent getting final positions in place ahead of month end and next week’s Presidential Election. Once again, we had sizable declines in the outside markets, and these weighed on commodities as the day progressed. We did have a flash sale on soybeans today of 121,500 metric tons to an unknown buyer. Improved weather conditions around the world limited today’s price potential while support came from the fact none of the spot contracts are currently overbought.

It has been several days since a confirmed soybean sale has been made to China in the flash reports. Sources in China are reporting this is a result of coverage now being met to last through January. By then it is believed the Brazilian crop will be ready for export, even with slight delays. This has caused China to start booking more of their projected needs from Brazil. The question now is if other buyers will step up to fill this void. This unknown may prevent the USDA from altering its soybean demand projection in the next few supply and demand reports.

The USDA is also showing hesitation to alter its Chinese corn demand forecast, even though the country has already booked more corn than expected. Initially China had said it would book 7 million metric tons of US corn this year. Currently China has booked well above this level, and claims the corn going into state reserves are not included in their 7 mmt total. This confusion has some thinking China may end up cancelling corn purchases, including the USDA, which is preventing the total corn demand from being upped in balance sheets.

When it comes to demand all interest this year has been on China, but they are not the only ones to elevate their buying. Another source of demand has been to the European Union as drought has impacted those countries as well. Since July the EU members have increased their soybean imports by 4% from a year ago to 4.47 million metric tons. While this is not as large as what China is buying, it does tighten global reserves.

Another country that has turned into an importer of commodities recently is Brazil. Brazil has once again exhausted its domestic inventories and is turning to imports to satisfy demand. The most talked about is soybeans with Brazil booking a reported four cargoes for import this week. Brazil is also buying other products for import to help curb inflation and prevent economic issues in the country.

Economic issues are also driving the commodity market in Argentina. High tax rates in Argentina have prevented many farmers from selling much inventory this year, especially soybeans. As a result, Argentine crushers continue to run out of product. This has brought more buyers to the US for soy products and supported our crush industry as a result.

Ukrainian officials report that winter wheat planting for the year has concluded. It appears that farmers in the country only seeded 91% of projected acres as drought conditions reduced planting interest. Thoughts are that these acres may end up being seeded to corn next spring. This would be welcomed by the Asian market as they are going to need corn imports and do not want to be tied to just a few locations to source from.

Several corn producing countries around the world have seen values on that grain rally to record levels. One of the countries is Brazil where corn has rallied 28% in recent months. It is quite likely this will cause additional acres to be planted to corn this production year. One difference between Brazil increasing acres is they do not have to sacrifice them from another crop, which will allow for both corn and soybean production to expand in future years.

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, October 30th, 2020

Final month end positioning will dominate today’s trade. We may see more than the usual amount of this for two reasons. For one, the November soybean contract is in delivery and contract rolling has been taking place. Another reason for a likely elevation to fund positioning today is next week’s Presidential election in the US. Many traders may shore up positions today and wait until election results are known before reestablishing them. There is a significant amount of unknown that always enters a market ahead of this event, mainly on what changes we may see to global trade relations if we see a change in administrations. This can impact a market long after the election and into the new year. Not only can an election impact the commodity market but the financials as well. Once trade returns next week we will see this along with new month balancing drive the market. We will also continue to see trade monitor South America to see if Brazil can get its soybean crop planted in a timely manner as the window is starting to close for a timely crop. Updated economic reactions to the rise in Covid 19 cases around the world will also be a key factor in today’s trade.

Highlights

* Minimal damage from Hurricane Zeta

* Covid rapidly spreading through Europe

* Trade monitoring harvest delays in Upper Plains

* Record values encourage plantings in SAM

* IGC lowers world grain supply estimates

* Investors pulling out of mkts ahead of election

* Trade starting to position for Nov WASDE

* First Notice Day on Nov contracts

* Daylight savings ends this weekend

Corn

* Harvest near 90% by Monday

* Brazil 1st crop is 55% planted

* Brazil planting 9% behind normal

* Mexico remains top destination for US corn

* IGC lowers world production 4 mmt

Soybeans

* Harvest near complete by Monday

* US loadings a record 527 mbu

* 80% of US loadings to china

* Soy product demand supports entire complex

* No interest in farmer selling

Wheat

* Japan top destination for US wheat

* US loadings +4% from year ago

* US loading pace has slowed

* Winter wheat rating expected to improve next week

* Global crop benefits from rains

Livestock

* Weekly beef sales 18,900 mt

* Beef sales -13% from previous week

* Weekly pork sales +9% at 29,000 mt

* 2021 sales at 4,600 mt beef, 29,000 mmt pork

* Germany ASF cases continue to rise

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.

Closing Comments; Thursday, October 29th, 2020

Losses were again posted in early trade today as funds continued to liquidate long positions. The primary cause of this was ongoing concerns over the rise in global Covid-19 cases and their impact on economies and commodity demand. Thoughts that Covid will be a market influence for another two years increased these concerns. Additional pressure came from month end profit taking and a general exit of the market ahead of next week’s presidential election. Losses were held in check by thoughts at least some production loss took place following last weekend’s winter storms in the Plains. We did see large flash sales on corn with a huge 1.43 million metric tons to Mexico for the 2020/21 and 2021/22 marketing years and an unknown taking 140,000 metric tons for 2020/21.

Export sales for the week ending October 22nd favored the grains over soybeans. Weekly sales of corn totaled 88.3 million bu and wheat came in at 27.3 million bu, both above trade expectations. Soybean bookings fell in the middle of trade estimates at 59.5 million bu, which was still above the needs on a weekly basis. Several import buyers now report having soybean needs covered through the winter months though, which tempered the higher number.

The United States continues to see limited competition in the global market on corn sales, especially from Ukraine. For the Ukraine marketing year that began in July the country has exported just 1.5 million metric tons of corn. This compares to the 3.6 million metric tons that were exported in the same period a year ago. This has been a great benefit for US exports as Ukraine was a leading competitor last year, especially into the Asian market.

The one commodity Ukraine has not backed off on exporting is wheat. So far this marketing year Ukraine has exported 10.1 million metric tons of wheat, just under last year’s 10.9 million metric tons. The question is how long this export volume will last as Ukraine’s government has set an export limit of 17.5 million metric tons for the year. While stating there is no reason to limit the country’s wheat exports, that may change if this level is reached.

The world market has seen corn values rally to record levels in many countries, and as a result, plantings are expected to increase. This is the primary reason Brazil is forecast to produce a 111 million metric ton corn crop this year compared to 102 million metric tons last year. South Africa and China are also forecasting larger corn production given current values. Even in the US it is believed high corn values will prevent a sizable acreage shift to soybeans.

Even with the world market rallying, US corn remains very competitive with other sources. In fact, US corn is actually under the domestic values of corn in both South America and China. The immediate reaction is this will favor US exports, and while possible, a large build in sales is unlikely. This is because US port space is already heavily booked from previous sales. The next available opening for vessels is in early January, and by then the world is market is hoping for cheaper corn out of other sources.

One factor that will determine weather in South America and several other regions of the world is the La Nina event. Current models indicate this system is strengthening which means dry conditions may shift from Argentina into Brazil. The La Nina is also holding Southern US states in a dry pattern. The question now is how long the La Nina may last, as even though its strengthening, if its short-lived its overall impact may be limited.

The International Grains Council updated its world production forecast on wheat and corn today, and for the second consecutive month, lowered it on corn. The IGC is now predicting a world corn crop of 1.16 billion metric tons this year, down 1 million metric tons from the September estimate. This comes after a 6 mmt reduction to the global corn crop in September. Global grain production was only reduced 1 mmt to a 2.23 bmt total though as world wheat production is forecast to increase. World grain consumption also increased 3 mmt this month to a 2.22 bmt total. Global grain carryover is now forecast to total 619 mmt this year, 10 mmt less than the September estimate.

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, October 29th, 2020

Some concern is being voiced over the quality of this year’s crops, mainly on corn. While for the most part corn is in high quality some cases of low test weights are surfacing. These are not widespread right now and may be isolated. Even so, it may cause buyers to be more selective when it comes to purchases especially with elevated futures. Even in regions where crops were harvested with little issue this year trade will be closely monitoring storage plans. According to many producers across the Corn Belt they have no interest in marketing bushels in the near future. As a result, inventory this year may be held longer than usual. This does tend to increase damage potential, especially if bushels are held in substandard facilities. We are starting to hear of elevators and end users offering reduced and free storage programs which may encourage movement and limit quality loss. Heavy selling took place in the market yesterday and it appears as though this will carry over into today’s trade as well. The lack of fresh fundamental news and fading technical support are primary causes of this, but more so is the building concerns over rising Covid cases around the world and their impact on the economy.

Highlights

* Lack of Chinese business noted

* Farmers selling slows, but still happening

* Ukraine grain exports -16.4% from 2020

* Rains benefit Russian crops

* Active planting in Brazil soybeans and corn

* SAM weather outlooks continue to improve

* Outside markets not favorable for commodity values

* US ethanol stocks lowest since Dec 2016

* US ethanol production -6.3% year ago

* FND on Nov soybeans tomorrow

Corn

* Interior basis continues to firm

* Buyers already looking at Holiday coverage

* Corn importers look at wheat instead

* Ukraine corn crop lowered 6 mmt, now at 30 mmt

* Trade monitors slowing export inspections

Soybeans

* Parana Brazil planting up 29% in last week

* Parana planting near normal pace

* Several basis pushes noted

* Some yield loss from winter storms noted

* Chinese values continue to firm

Wheat

* Russia undercuts global market

* Potential winterkill in Northern Plains

* Black Sea sales dry up

* Wheat feeding on the rise

* Argentine crops sees rains, may be too late

Livestock

* US frozen beef supply lowest in 6 years

* Frozen pork supply lowest in 10 years

* Wholesale beef under pressure

* YTD beef slaughter -3.8% year ago

* Hog slaughter remains +1% on the 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.

Closing Comments; Wednesday, October 28th, 2020

A sharp correction took place in the markets today as traders exited many of their long positions. Light month end profit taking and positioning for the upcoming US election were the initial cause of this, but this snowballed into heavy selling as the session progressed. This was not just in commodities but in all markets, including energies and equities. Renewed concerns over the rising cases of Coronavirus on a global scale and news of shuts downs were a primary cause of this. These come as the passing of a Covid relief package in the immediate future were snuffed out. We did see flash sales this morning, but trade overlooked nearly all fundamental influences. These sales included 110,000 metric tons of soybeans to Egypt, 120,000 metric tons of soybeans to an unknown, and South Korea booking 207,000 metric tons of optional origin corn.

Rising cases of Covid 19 around the world are becoming a driving force in the world markets. The most notable today was Germany shutting down several portions of its economy including non-essential travel in an effort to contain the virus. In the US we are hearing of some cities again shutting down indoor dining and this is likely to expand. The concern is this happening right before the Holiday Season.

The lack of an economic stimulus package being passed is again weighing on not just commodities, but all markets. Investors had been hoping this package would be passed to revive consumer confidence. Without these funds we may see less consumer spending at a time when it usually increases. We are also seeing less travel given the economic uncertainty which has put pressure on the energy market.

It was announced today that Brazil has in fact booked US soybeans for import. A newswire report indicates Brazilian buyers have booked 1 cargo of US soybeans which is less than what had been hoped for. Sources in Brazil claim sizable US soybean imports are unlikely given the logistic issues they bring. Not only do the soybeans need to be unloaded once they reach Brazil, but then trucked a considerable distance to a crush facility. This adds cost to the import value and makes them uneconomical. Same as with corn there are also worries over GMO contamination with US soybeans, further reducing the desire for imports.

One buyer that has stepped up its US corn imports recently is Mexico. So far this marketing year Mexico has imported 12.23 million metric tons of US corn, a 3.6% increase from a year ago. Of this total 10.8 million metric tons has been sourced from the US which is a 5.3% increase from last year. This increase is from tight corn supplies in Brazil where Mexico’s imports are down 5.6%.

We are starting to see mixed opinions when it comes to the Brazilian soybean crop. Several private analysts are projecting the crop at 133 million metric tons which is line with official projections. Others are not as optimistic though and believe delayed plantings and weather conditions for the area that is already seeded will trim crop size. These estimates range from 127 mmt to 130 mmt, and while this does not seem like much of a reduction, will alter the global soybean balance sheets.

We are also seeing updated estimates on the Brazilian corn crop. Most analysts have the crop projected at 110 million metric tons which is in line with official estimates. Many are quick to claim the crop could be trimmed lower however, as delays to the soybean plantings are also likely to delay the planting of the Safrinha crop. This could push the crop into the dry season before it is fully mature and trim bushels. That said, record corn values in Brazil will entice farmers to plant as many acres as they can.

The ethanol report for the week ending October 23rd was again mixed for trade. Ethanol manufacturing during the week totaled 6.587 million barrels, a 3.1% increase from the week before. Ethanol stocks decreased 120,000 barrels in the week though, and now stand at 19.6 million barrels versus 21.1 million a year ago. This is the least amount of ethanol in reserve since December 2016.

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, October 28th, 2020

Futures were heavily pressured overnight as the light buying we have seen in recent sessions turned into active profit taking. We will start to see an increase in month end positioning during today’s session and have it build over the next two sessions. This will mostly be on soybeans as the November contract goes into delivery. Many of the November positions have already been rolled forward which may limit market volatility. We are also going to start seeing even more interest on the South American planting season with an emphasis on soybeans in Brazil. Most farmers in Brazil claim fieldwork is progressing at a rapid rate and the crop will end up being seeded in a normal window despite the late start. This will be closely monitored by trade as the global market is already depending upon a large Brazilian soybean crop to build reserves. These bushels are also being counted on by the Brazilian market, who is not only short on soybeans, but on corn as well. Brazil has developed a pattern of marketing 100% of its crops in recent years, but after running short and being forced to replenish reserves with expensive global stocks, may be less interested in doing so this year.

Highlights

* Profit taking develops

* Market positioning for Presidential election

* Funds remain long most commodities

* Hurricane Zeta to make landfall this evening

* Large jump in Brazil planting this week

* Trade is questioning SAM production numbers

* La Nina shows signs of strengthening

* Most Brazil imports to come from other sources

* US export supplies questioned

* Lack of Covid relief weighs on all markets

Corn

* US corn sales at 1.1 bbu

* Corn sales 48% of yearly estimates

* Ukraine yields 17% under USDA estimates

* Ukraine corn supply -6.4 mmt from year ago

* Basis turns positive in many interior locations

Soybeans

* Yearly sales at 76% of estimates

* Yearly sales 2x year ago

* China accounts for 55% of weekly sales

* Argentina farmers not selling inventory

* Brazil planting up to 25%, is half of normal

Wheat

* Global wheat buying rises

* US marketing year loadings at 375 mbu

* Ukraine production 8% under USDA estimates

* Attaché lowers Ukraine exports by 950,000 mt

* Argentine estimate 2.2 mmt under USDA

Livestock

* US beef exports remain strong

* Cattle feeder margins tighten

* US pork exports +25% from year ago

* US frozen pork supply tightest in 10 years

* Slaughter numbers slowing

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.

Closing Comments; Tuesday, October 27th, 2020

Grains were the leaders early in today’s session, taking support from a strong cash market on corn and the low quality rating on the winter wheat crop. Soybeans were mixed to start but eventually moved to the positive side as well. Soybeans were pressured by improved global weather conditions, mainly in Brazil. Trade is again monitoring a hurricane in the US Gulf that will make landfall tomorrow afternoon. Damage from this is expected to be minimal, but it will still slow exports. There were no flash sales announced this morning which weighed on all contracts as did a drop in buying interest as the session progressed.

The initial condition rating on the US winter wheat crop was released yesterday with a surprisingly low number. Just 41% of the US winter wheat crop is rated as Good/Excellent compared to estimates for 45% to 48%. This compares to last year’s initial rating of 56% G/E and is 17 points under the average rating. At 41% the crop rating is the lowest since 1986. Thoughts are this number may improve next week though as rains move through the dry regions of the Plains.

Not only is trade monitoring the rating of the US wheat crop, but that in Brazil as well. Harvest is starting to progress in Brazil’s wheat crop and yields are well below normal. Some regions of the country claim production will be down 30% from last year due to the same drought conditions that delayed soybean planting. Typically Brazil imports half of its wheat needs from Argentina, but that country is also suffering from drought, so we could see elevated US exports as a result.

Brazil has seen its corn values climb to record levels in recent weeks. Corn in Brazil is now at the $7.00 per bushel level and nearly equal to the cost of US imports. This generates ideas that Brazil will soon be turning to the US for corn coverage. While possible, currency exchange rates may prevent sizable corn sales from happening. Buyers in Brazil are also showing concern over GMO content in US corn and what it may do to their domestic market.

Chinese interest remains a leading influence on soybean values. While China remains the United States’ leading soybean buyer, the United States is not China’s leading soybean source. In the month of September China imported a reported 9.8 million metric tons of soybeans. Of these, just 1.17 million metric tons originated from the US. This is a trend that has started to develop with the US providing China just enough soybeans to bridge the gap between South American harvests.

Another source of support the soy complex has had that is diminishing is drought in Brazil. Heavy rains have moved through South America in recent days helping replenish dry soils. This has allowed soybean planting to pick up the pace in Brazil with the major production state of Mato Grasso now reporting planting at 25%. While this is half the normal pace, and the slowest since 2015, sources in Brazil claim plantings may be at normal rates within the next few weeks.

Global weather on a whole has improved since a week ago. Not only has South America seen beneficial rains but so has the Black Sea and the dry US Plains. The question now is if this will benefit developing crops or simply prevent further losses. The most interest on US weather right now is on wheat as the crop heads into dormancy.

Domestic markets are starting to focus more on demand and less on production. This is especially the case on corn where we are again starting to see some doubt cast over future ethanol production given current market economics. Even if we do see ethanol usage decline it may not affect the market as much as some fear given the likely increase to feed demand given the larger livestock numbers. It is not out of the question that domestic demand on a whole could be underestimated.

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; Tueday, October 27th, 2020

As expected, a large amount of harvest took place in the US last week. Corn harvest is now at 72% and soybeans are at 83%. These are both at levels where trade will quickly put the year to rest and focus instead on what will be done with the new inventory. Many farmers marketed a large volume of soybeans as soon as they came out of the field given the lack of carry in the market. Some producers across the Corn Belt report being upwards of 75% sold on the soybeans they just harvested. The remaining soybeans are being held in storage and may be hard to purchase given the adequate cash flow generated from sales that have already taken place. Corn sales have also taken place but at a slower rate. There was more carry in the market prior to and at the start of harvest, and as a result, many producers forward contracted their bushels. This is keeping sales into the spot market at a minimal level. This lack of selling is causing processors across the interior market to post incentives for quick ship bushels and creating favorable marketing windows.

Highlights

* Chinese demand rives ocean freight higher

* Chinese Phase 1 Ag purchases 71% satisfied

* Another hurricane in US Gulf

* Hurricane Zeta expected to make landfall tomorrow evening

* Interior basis values remain strong

* Processor margins under pressure

* Many ethanol plants now in red

* SAM production estimates remain high

* US/World Covid cases continue to rise

* Lack of Covid relief weighs on equity market

Corn

* Corn harvest at 72%

* May see delays to remaining acres

* Russian yields -9% from last year

* Brazil not expected to make imports

* Farmer sales very limited

Soybeans

* Soybeans 83% harvested

* Brazil farmer sales drop off

* Very few Brazil imports expected from US

* China Sep imports at 9.8 mmt; 1.17 mmt from US

* More positioning for FND

Wheat

* Winter wheat 85% planted

* Winter wheat 62% emerged

* Initial crop rating at 41% G/E

* Wheat is now in perpetual production worldwide

* Russian export limits more likely

Livestock

* Yearly beef exports 650,000 mt

* Yearly sales +1.2% from 2019

* Yearly pork sales +25%

* Chinese hog values starting to falter

* China pork values up 30% on the 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.

Closing Comments; Monday, October 26th, 2020

Corn, soybeans, and wheat all started the week under pressure as much of the fundamental support the market has been using shifted to a more neutral bias over the weekend. Widespread rains moved through Brazil over the weekend and planters are now rolling across much of the country. While overall plantings remain well below normal, we may see totals catch up rather quickly. Improved weather for the US and Black Sea also weighed on trade today. Investors exited several markets today which put additional pressure on the commodities. We did see flash sales today with 120,700 metric tons of soybeans to an unknown and a meal sale of 135,000 metric tons to the Philippines which gave the soy complex support.

We have seen a surge in Brazil soybean sales this marketing year compared to average. A reported 55% of the Brazilian soybean crop has already been sold, which is not surprising given recent market appreciation. Sales have stalled in recent weeks though as concerns over production and soybean availability have risen. Many buyers in Brazil do not want to extend their coverage either as they are worried over the cost of storage for the remainder of the marketing year.

Trade is keeping a close eye on how much fall tillage is completed this year. While a considerable amount of this has been done in the heart of the Corn Belt, the fringe areas are again struggling to get field work completed. The recent shift to cold, wet patterns in these regions is again stalling harvest and likely going to limit the amount of fall work that can be completed. This is not as bad as last year but could again have an impact on acres next spring.

Any basis pressure that came with this year’s harvest has been erased in much of the Corn Belt. Country movement came to a halt in regions where harvest has concluded, and buyers are already struggling to secure coverage. Buyers are now looking at winter months and trying to buy bushels in that time frame as well. Given this demand and need for coverage, and significant basis declines are unlikely at this time.

This strong basis trend is not being welcomed by all, however. The most concern is coming from the ethanol industry where strong basis values have dropped processing margins into negative territory. While none have done so yet, if this trend continues, we will likely see plants again start to slow production. The firm basis on corn is also deterring feed usage with more consumers shifting to wheat as a feed ingredient.

More interest is being placed on Chinese corn interest from the global market. China has indicated it will be increasing its corn imports from all sources, including the US. The immediate reaction to this was it would be supportive for corn futures. One concern with this is that the increased demand will give interior basis even more strength and further weigh on domestic usage.

China has seen a considerable rebuilding of its domestic hog herd this past year. China currently has 370 million hogs in its system which is just 16% less than prior to the African Swine Fever outbreak. China wants to cover at least 80% of its pork demand with domestic production and this volume puts them on track to reach it. This is a primary reason for China to claim its pork reserves are adequate heading into the Lunar New Year, and also behind the recent cancellations of recent purchases.

Export loadings for the week ending October 22nd favored soybeans over the grains. For the week the US inspected 97.9 million bu of soybeans for export which was well above the volume needed to reach USDA yearly projections. Corn inspections fell short of the needed amount at 25 million bu, as did wheat with 13.4 million bu.

The October cattle on feed report was released last Friday and does raise hopes for additional feed grain demand. A record 11.7 million head of cattle were on feed on October 1st, a 4% increase from a year ago. This increase was from a 6% yearly increase in placements at 2.23 million head. We did see a 6% increase to marketings in September as well to a 1.85 million head 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, October 26th, 2020

Trade is expecting to see another jump in harvest data in tonight’s release. Soybean harvest is now expected to be nearly complete. Corn harvest should be near or above 75% as attention was more on that crop as soybean harvest winds down. We will start to see elevated positioning ahead of month end this week with an emphasis on soybeans. This is from the November contract going into delivery. Many positions have already been rolled to the deferred months, but there always remains a few that still need to be moved. It may not be surprising to see traders simply shore up their positions today ahead of next week’s Presidential Election and not return until after that, and possibly longer depending upon the election results. Trade will continue to focus on many of the same fundamental factors this week that is already has been, with global weather being a primary one. October is set to go down as one of the coldest in 125 years in the Upper Plains and there is concern over this impact on developing wheat. Of course the planting updates from Brazil and drought reports from the Black Sea will be factors as well.

Highlights

* Month end positioning starting to increase

* Trade also positioning for Presidential Election

* Remainder of harvest slowed by weather

* Still likely to finish ahead of normal

* May see limited fall tillage this year

* US ethanol margins under pressure

* Processors forced to push for coverage

* Long range Sam weather is favorable

* US/World Covid cases continue to rise

* Brazil farm machinery sales rising

Corn

* China corn near $10.00/bu

* Highest corn value since 2014

* Japan feed ration near 50% corn

* Average US basis -26Z

* Corn test weight variable this year

Soybeans

* Average US basis -54X

* Nov crush margin strong

* Deferred crush margins under pressure

* Harvest near complete tonight

* No changes to Brazil production estimates

Wheat

* US over-priced in global market

* Wheat exports drop as soybeans take over

* China increases wheat feeding

* Trade expects freeze damage in US

* Initial winter wheat rating expected tonight

Livestock

* October 1st COF 104% year ago

* Total COF in US at 11.7 million head

* Sep placements at 106%; 2.23 million

* Sep marketings 106%; 1.85 million

* China canceled pork bookings last week

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.

Closing Comments; Friday, October 23rd, 2020

Much of today’s session was spent consolidating into the weekend. This limited corn and soybeans, especially with improving global weather conditions. Wheat was in positive territory today as the contract attracted fresh buying interest. Much of this was in reaction to the weekend freeze that is expected for the Northern US Plains. Grains are again overbought, but this did not deter this interest. We had a flash sale 100,000 of corn to an unknown, but nothing on soybeans and no interest from China.

When it comes to global corn balance sheets all eyes are centered on China. China has started to import more corn and is only forecast to elevate its needs in the future. China liquidated much of its usable corn reserves and now needs to refill this void. There are questions on how much corn China will need, with estimates ranging from 7 million metric tons to 30 million tons. Even if imports fall in the middle of this range it will be enough to alter global balance sheets, especially if weather continues to impact South American production.

We are seeing a shift in grain demand that could end up impacting corn balance sheets. Over recent weeks we have seen more wheat used as a feed grain in several countries. Two of these getting the most attention are China and South Korea. While wheat is more expensive, it is more readily available, and attracting buyers.

Brazilian producers have already marketed a reported 55% of this year’s soybean crop. This is considerably higher than average as record returns were seen following currency exchange rate changes. Many of these sales took place prior to the recent rally we have seen in soybean futures though, and many are now wanting to renegotiate contracts. This may prove to be difficult as not only do Brazilian farmers outright sell soybeans, but many barter with them for inputs.

US soybean sales for export are starting to be monitored. The USDA is currently projecting marketing year soybean exports of 2.2 billion bu. Some analysts feel this number will be higher though, and possibly approach 2.3 billion bu. While this is only a minimal increase, it would drop new crop ending stocks below 200 million bu. We have already started to see usage rationing though, and our demand will likely decrease even more once the South American crop becomes available.

Trade is receiving more estimates on the Australian wheat crop for 2020/21. At the present time the crop is estimated at 28 million metric tons, nearly 80% more than the 2019/20 crop. This is from an end of the drought that has impacted wheat production for the past several years. Many regions of the country are predicting record production this year, an in turn higher exports. At the present time Australia is expecting wheat exports to double next year, with most of the grain going into the Asian market.

A story that has been visited several times recently is what impact current market values will have on new crop acres in the United States. There are several who believe we will see a considerable shift from corn to soybeans given the recent price spread, but numbers may be exaggerated. Some forecast a shift of nearly 7 million acres, and while we have seen this great of a volume in the past, recent history does not indicate we will see that many altered this year. Current models indicate the numbers may be closer to 6 million, and even then, it is questionable.

The cold storage report for September has been released with numbers that are supportive for pork. A reported 466.5 million pounds of pork were in storage facilities at the end of September, 132 million fewer than a year ago. Pork bellies in storage totaled 24.8 million pounds, well below the 40.5 million a year ago. Beef in cold storage was also down, decreasing 7 million pounds to total 462 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.

Morning Comments; Friday, October 23rd, 2020

The variability we are seeing surrounding this marketing year are increasing. This has been a factor in the market all growing season, starting with last spring’s planting conditions. The most variability we are seeing this year is on yield, primarily on corn. Reports from the Western Corn Belt indicate corn yields are ranging from 40 to 50 bushels per acres below average to record high volumes. This appears to depend upon field conditions with corn on corn being the lowest yielding. A result of these yields and production totals is mixed movement. In areas where yields are the lowest, we are seeing the least corn movement, which is not surprising. In turn, this is also causing basis values to rise faster in those regions than the ones with better production numbers. Soybean production is more consistent across the Corn Belt, but movement has started to rapidly decline as harvest winds down and buyers are already pushing bids to entice sales. There is little doubt this is a factor that will continue all marketing year, especially until the South American crops become available and lessen our export demand. Commodities appear to be moving into a consolidative mode ahead of the weekend which is not surprising after the week we have had.

Highlights

* Chinese commodities hit record highs

* Brazil imports not expected to rise

* US dollar remains unstable

* Cold Storage report shows declines in stocks

* US gasoline demand -14% from last year

* US ethanol -16c/gal from Brazil

* US ethanol margins under pressure

* Covid impact on energy demand expected to last for years

* Black Sea rains not significant

* Country movement slowing

Corn

* Argentine crop -4.4 mmt this year

* Brazil 1st crop 44% seeded

* Ukraine harvest 40% complete; exports are limited

* Gulf basis weakens

* Interior basis firms

Soybeans

* Dry conditions in Brazil limit fungal disease

* US soy exports 3 weeks ahead of normal

* Larger US production expected

* US harvest winding down

* Crush margins only firm in spot market

Wheat

* US export +6% on the year

* Initial condition report next week

* Weekend freeze damage expected

* US plains remain dry

* Ukraine export values at 2 year high

Livestock

* Weekly beef sales 13 wk high at 21,700 mt

* Pork sales at 26,800 mt

* Pork in cold storage at 466.5 million pounds

* Pork bellies at 24.8 million pounds

* Cold storage beef inventory at 462 mil pounds

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.

Closing Comments; Thursday, October 22nd, 2020

While corn and soybeans were on the positive side today, the market is beginning to get more of a consolidation feel. One reason for this is additional buying in an overbought market starts to become a struggle. Another is that the market is starting to run out of fresh fundamental news. Global production remains uncertain however, and that is giving the market underlying support. Any attempt to decline today was halted by the strong weekly export sales numbers and sizable flash sales. Soybean sales of 152,404 metric tons to Mexico and 132,000 metric tons to an unknown and a white wheat sale to South Korea of 130,000 metric tons.

Export sales for the week ending October 15th were much better than expected on corn and as expected on soybeans and wheat. Corn sales for the week totaled 72.1 million bu which was well above the volume needed to reach the USDA yearly objective. Soybean sales were also high at 81.77 million bu but were within trade guesses. Wheat sales were also within estimates but lighter at 13.5 million bu.

Meat exports were also mixed. Beef sales for the week totaled 21,700 metric tons, a 62% increase on the week. The primary buyer of US beef on the week was South Korea. Weekly pork sales totaled 26,800 metric tons which was nearly equal to a week ago. Mexico was the primary buyer of US pork, and very little was booked by China.

Planting is starting to gain momentum in Brazil. A reported 44% of the country’s first corn crop is now seeded. Soybean planting is also advancing and while behind normal, 10% of the crop is now seeded. Sources in Brazil claim planting will advance rapidly over the next two weeks and likely be close to normal by that time. Analysts are hesitant to reduce the Brazilian crop size until we get to the point where acreage may be affected.

It is no surprise that that if plantings are delayed in Brazil, exports will be too. While most of the attention on this is on soybeans, it will also be a factor for corn. It is believed Brazil will now not be making corn exports until late July or possibly August next year. This depends heavily upon the pace of Brazil’s soybean exports and when port space will open up. Brazil’s total corn exports are being questioned though as domestic demand is building faster than production is.

Weather remains a concern in the Black Sea with most attention on wheat. There are now worries that rains will move into the dry regions of Ukraine and Russia and bring just enough moisture to get the crop to sprout, and then be followed by freezing temperatures. Many farmers in the region now hope the grain simply remains dormant rather than seeing it freeze off. Some doubt is being cast over the already reduced crop size from this development.

As a result of this potential development and recent shortages, Russia has announced it may form a state grain fund. Officials in Russia would like to see a reserve program that would cover from 2 to 4 months of grain demand, mainly on wheat. Russia nearly depleted its wheat supply this year which caused values to rally to record highs for domestic millers. By forming a reserve the government will be able to release stocks to limit price impacts, same as China does with its commodities.

While several months away, Chinese officials claim the country’s pork supply for the Lunar New Year will be considerably higher than last year. Estimates are China will have 30% more pork in reserve this year than last as the country’s hog herd rebuilds. Not only has China opened 12,500 new hog facilities but reopened 13,000 that were closed when the African Swine Fever outbreak took place. On a whole Chinese official claim the country’s hog herd is back to 80% of pre-outbreak levels.

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, October 22nd, 2020

An underlying factor in today’s market remains weather on the global front. Conditions remain dry in the Black Sea and we are seeing crops sizes ratcheted down as a result. While these are getting smaller, it is no longer surprising to trade, and not getting as much reaction in the market. Even with losses in the Black Sea the global grain supply will remain adequate, especially on wheat, which is also muting reaction. The dry weather in South America is also an ongoing factor, even though planting is taking place in Brazil. These conditions are the ongoing result of the La Nina weather event which is showing signs of strengthening as the fall progresses. There are now indications this even may stay intact through the winter months and possibly into next spring. Other models show it breaking down in mid-winter and moving back towards neutral indications. If the La Nina holds it will be detrimental to Argentine production and a likely impact Brazil also. Drought may also linger in the Black Sea if this remains in place. The United States will not see much of an agricultural impact unless the La Nina is still active next spring.

Highlights

* Large Brazil imports unlikely

* Price/Timing not conducive to imports

* Lack of storage concerns across the US noted

* Remainder of harvest may be stretched out

* Brazil economy impacting commodity sales there

* US ethanol production -2.6% last week

* Ethanol stocks down 168,000 barrels

* Shutdowns from Covid again taking place

* US basis expected to remain firm

* Grains remain technically overbought

Corn

* Buyers still booking Brazil corn over US

* US corn over valued in global market

* Spot corn values highest in 14 months

* Very light farmer selling noted

* US processor coverage is minimal

Soybeans

* Plantings ramping up in Brazil

* No changes made to SAM production

* Total planting 25% behind normal

* US port space limited until SAM harvest

* Brazil record sold on soybeans

Wheat

* Wheat spreads at multi-year highs

* France wheat acres to increase

* French production crop at 616 mbu

* US winter wheat acres most in 2 years

* US freeze this weekend

Livestock

* Cattle on feed tomorrow after the close

* October 1st on feed at 103.3%

* Placements up 2.5% in September

* September marketings up 5.9%

* Cash trade is quite thin this week

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.

Closing Comments; Wednesday, October 21st, 2020

Soybeans remain the leader of the market as that is the commodity attracting to most buyers. A main reason for this is soybeans are not overbought at the present time like the grains are and there is more room for fund involvement. Ongoing weather worries in Brazil also benefited soybeans, although conditions are expected to improve considerably over the next few weeks and planters are rolling across much of the country. Grains were mixed today and limited by harvest pressure and the fact both corn and wheat are technically overbought. All contracts were pressured by a lack of flash sales and a noticeable decline in Chinese buying on a whole.

Soybean planting is starting to advance in Brazil but remains well below average. An estimated 9% of the Brazilian soybean crop has been seeded compared to the average 33%. Farmers in Brazil are not showing as much concern as expected though, as now that seeding is underway, they believe a tremendous amount of activity will take place. Sources in Brazil claim 60% of the country’s first soybean crop will be seeded in the next two weeks. If correct, this will alleviate some concern over a delayed harvest.

Even with planting issues, we have not seen significant changes made to South American production estimates in Brazil or Argentina. Crop scouts are still projecting crop sizes of 133 million metric tons on soybeans and 111 million metric tons on corn. In Argentina crop sizes are at 52 million metric tons on soybeans and 50 million metric tons on corn. Scouts claim they want to see if current weather conditions persist before altering crop sizes.

Any changes to Brazilian production will depend on how soon rains return to the country. A reported 79% of Brazil has been deficient on rain fall in the past 30 days. A year ago just 43% of the country lacked rainfall, and two years ago it was a minimal 9%. The difference is the timing of the rainy season starting which has been delayed this year.

Farmers in Brazil are not worried about production either and continue to make sizable forward sales. In the country’s leading production state of Mato Grasso, farmers are already 61% sold on their soybeans compared to the average 34% at this time. Farmers in the state have also marketed 54% of their expected corn crop compared to the normal 32%. Record returns are the primary reason for the elevated selling interest. Farmers are also marketing their 2022 crops which is unusual this far in advance.

Not only are analysts in South America leaving crop estimates unchanged, but several in the US are as well. Several are leaving their corn crop estimate unchanged at 14.7 billion bu which was the number the USDA released in the monthly balance sheets. This is surprising to some as we have heard several reports of less than expected production across the Corn Belt. Analysts are bumping up their soybean production estimates a minimal amount and believe it will total close to 4.3 billion bu.

Ethanol manufacturing for the week ending October 16th decreased 2.6% from the previous week. A reported 6.39 million barrels of ethanol were manufactured in the week, 168,000 fewer than the week before. Ethanol stocks also decreased on the week by 287,000 barrels. US ethanol reserves now stand at 19.72 million barrels compared to 21.4 million a year ago.

Mixed reports continue to come out on the Chinese corn crop. Trade had thought production would be down this year due to late season typhons that hit the country. Sources in China claim any loss of production will be minimal from the event, and total corn output will be higher than a year ago. They claim the typhons mean the corn needs to be harvested by hand, which takes longer, but does not impact yield. This could easily alter what trade has been predicting for Chinese corn imports.

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, October 21st, 2020

Soybeans remain the leader of the market with all attention on the South American planting season. Planting is delayed in Brazil, but is starting to gain momentum, and will soon be at normal rates according to sources in the country. Soybeans are also benefiting from the fact that is not overbought such as the grains are and is enticing buyer interest. Trade is still monitoring the number of Covid cases around the world and what they may mean for commodity demand. Cases are again rising in many regions and thoughts are they may continue as the seasonal influenza period takes place. Ahead of this we are already starting to see some of the world’s commodity importers stockpiling food products. So far this has mostly taken place in wheat and in regions of short production. This is centering on the Black Sea. The concern is not just that food grains and products are going to be in short supply but that Covid may cause logistic issues. There are some thoughts that this is a part of the reason China has been buying commodities at the volume they have. This is also happening in Egypt on wheat. The recent announcement that Russia may be issuing quotas on exports is also being credited to worries over future food grain supply.

Highlights

* Covid continues to impact commodity demand

* Chinese economy improves 5% in 3rd quarter

* China may limit exports to ensure domestic supply

* Ukraine grain exports -16% yearly

* Russia may create state grain reserve

* US judge rules no cuts to food assistance programs

* Record Brazil planting over next 2 weeks

* Ocean freight favors SAM over US

* Analysts increase soy acreage estimates

* Weekend weather likely to delay fieldwork

Corn

* US corn sales +635 mbu last year

* Corn loadings +70% on the year

* Gulf basis rising

* Harvest may be slowed by weather

* Argentina to suspend corn sales

Soybeans

* Yearly sales +928 mbu from 2019

* Soy loadings +81% from year ago

* Gulf basis firming

* Farmer selling slows

* All eyes on Chinese demand

Wheat

* EU plantings up, even with poor weather

* EU crop up 9% on the year

* Egypt fills reserves to 7-month supply

* Ukraine exports -11%

* US yearly shipments at 369 mbu

Livestock

* China pork production +18% in 3rd quarter

* Yearly pork production -10.8%

* Chinese beef production -1.7%

* Poultry production in China +6.5%

* Hog market corrects from overbought

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.