Dec 07, 2020

Long Liquidation Continues to Start Week

Trade looks for overall supportive numbers from USDA this week

source: FBN

Trade Expectations for USDA’s Monthly Reports

  • December reports are slated for release mid-morning on Thursday, December 10.
  • Versus November, the trade looks for smaller stocks for the US corn, soybeans, and wheat.
  • Brazil’s soy crop is seen at 132 million tonnes with Argentina at 50.4 million; both forecasts are down slightly from USDA’s report in November.
  • Corn production for Brazil is seen at 109 million tonnes and for Argentina, the crop is expected at 49.25 million tonnes, both lower versus November.
  • For the world, the trade looks for higher wheat stocks overall, at 321 million tonnes, likely on the larger Australian crop.
  • Global corn stocks are expected to decline about two million tonnes versus November while soybean stocks tighten as well to 85 million tonnes.

FBN’s Take On What It Means: The trade looks for overall supportive numbers from USDA this week. There will not be revisions to US crop production in this report, but updates to other countries, especially in the Southern Hemisphere, are likely. A surprise would be larger stocks for the US and/or a larger crop outlook for Brazil+Argentina.

Australia Ag Exports To Increase

  • ABARES increased its forecast for agricultural exports to A$49.24 billion, up from A$48.8 billion in September.
  • Exports are set to rise after three years of drought were broken by heavy rains this season.
  • The total would be higher except for the trade dispute that is brewing with China.
  • China has imposed anti dumping tariffs on barley and wine after Australia encouraged an investigation into the start of the coronavirus.
  • There is concern that the dispute will spill over into the wheat trade just as Australia has harvested its second largest crop on record.

FBN’s Take On What It Means: While Australia’s sales to China may be affected by tariffs, the country is actively seeking other destinations for its increased supplies. Some world wheat values may suffer from the increased competition. However, there have been reports of China inquiring about US hard wheat availability. If purchases are confirmed, it would be supportive for prices here.

FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)

The risk of trading futures and options can be substantial and may not be suitable for all investors. Past performance is not necessarily indicative of future results.

This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to, persons residing in Australia and Canada.

Kevin McNew

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Magazine

Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014