AgResource Company Aires, Cordoba and Santa Fe, precipJan 08, 2021 · Covid caused a sag from April through July. US beef e xports to major destinations were above last year. The

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** AgResource South American Weather Discussion ** Jan 8, 2021

4:30 PM CST

Meaningful Argentine Precip Confined to Northern Crop Belt; Dryness Persists

throughout Southern Brazil: The two-week South American forecast is

consistent. Showers will impact Argentina January 12-14, but soil moisture

improvement will favor areas just north and west of primary producing

provinces. La Nina’s impact on South America’s climate will be ongoing.

Complete dryness returns to Argentina in 6-15 day period. Two-week rainfall

accumulation in RGDS in far Southern Brazil will be just 50-70% of normal.

Sizable corn/soy yield loss is still anticipated in Argentina without a

dramatic/rapid rainfall improvement.

Despite coming spotty showers in Buenos

Aires, Cordoba and Santa Fe, precip

accumulation this growing season will be

far short of normal – and more in line

with 2017/18’s drought year. A more

regular pattern of rain is forecast in

Central Brazil, but it’s Argentina/S

Brazil where concern is elevated. Based

on projected yield loss in far S Brazil,

ARC maintains a 127-128 MMTs Brazilian

soy crop estimate. Argentine corn and

soybean production will be 45 MMTs or

less. South American crop sizes will

stay in decline.

** AgResource Farm Marketing Advice ** Jan 8, 2021

4:30 PM CT

AgResource Farm Marketing Advice for Monday: 1/ Wheat Producers: Exit 25% of

2021 Wheat Hedges basis July Chi futures at $5.86. ARC feels uncomfortable

with being 50% sold as the 2021 Russian wheat crop suffers under a drought.

Managed money or fund positions have changed little since late November with

the rally in the grain markets led

by the cash markets and end user

pricing. The chart reflects that

managed money is holding in a large

net long position that is being

rewarded almost daily. Funds are

long 25,000 Chicago wheat, 350,000

contracts of corn, 176,000 contracts

of soybeans, and 198,000 contracts

of soy products. If ARC looks at

fund length as a percent of US

supply and equates it back to the

2010 highs, funds could add another

150,000 contracts of net length in

the grain markets.






** AgResource Analysis of US Red Meat Trade ** Jan 08, 2021

4:30 PM CST

The January International Trade Report showed that US beef exporters shipped

out 277 Mil Lbs of beef in November, a record amount of beef for the month and

the largest one-month beef export total since August 2018.

Note that despite sharp declines in exports in May and June, the cumulative

US export rate is the 3rd

largest on record. The 1st

quarter export rate was record

large, and the 4th

quarter is

on track to reach a record.

Covid caused a sag from April

through July.

US beef exports to major

destinations were above last

year. The monthly export rate

to Mexico was the largest

since December 2013, but the

most significant figure was US

beef to China. China took 23.5

Mil Lbs of US beef in

November, making it the 5th

largest destination. Year to

date, US exporters have

shipped 92 Mil Lbs to China.

** AgResource World Corn Market Discussion ** Jan 8, 2021

4:30 PM CST

Global End Users to Use Breaks in CBOT Corn into June: Even ignoring ongoing

drought in Argentina and far S Brazil, the US corn market is highly

competitive in the world marketplace. CBOT corn has shown in recent weeks that

even modest breaks lack follow though. This makes good fundamental sense as

non-US markets continue to rise. Brazil’s interior corn market has rallied

further and remains perched at a 4-year high. Argentine fob offers have

returned for Feb-March but at elevated price levels.

The market is debating the strength

of psychological resistance at $5.00

CBOT corn. In real terms, this level

means little. There’s simply nowhere

else to turn for feed supplies. US

Gulf is offered at $234/MT for March

shipment. The next cheapest origin is

Argentine at $242. Amid late seeding

dates in South America, exporters

there will not return to the world

market in bulk until August. Any N

Hemisphere weather issues – or even

the perception of weather issues –

will trigger a robust scramble for US

corn in late spring/summer. Breaks

will be supported below $4.80 March.







4:30 PM CST

November US pork exports reached a 7 month high of 633 Mil Lbs, a record for

the month. US pork exports increased slightly over 2019 even as production was

lower. US pork exporters shipped a record large 26.3% of the month’s

production overseas.

November’s export growth is largely attributed to China, which reached a 6

month high of 168 Mil Lbs and accounted for 27% of the export total. In other

words, 7% of the US November

production was shipped to China.

Exports to the rest of the world

were near unchanged compared to a

year ago. This was largely due to

a surge in exports to Mexico which

reached a 10 month high.

The US pork market’s dependence

on Chinese imports is obvious.

Nearly 30% of US exports in the

last year have gone to China. Any

slow down in the year ahead will

be felt immediately in pork

prices. ARC’s concern is that

exports could start to slow by

midyear as China hog herd is

repopulated.


4:30 PM CST

While the official trade data from the Census Bureau shows beef exports

through November were slightly behind last year, the weekly FAS trade data

shows that beef exports through the end of December were slightly ahead of

2019. Exports averaged 40 Mil Lbs/week, with over 60 Mil Lbs exported the week

before Christmas. The FAS data shows that China was the 6th

largest export

destination for US beef in 2020. More importantly, outstanding sales for 2021

stand at 51 Mil Lbs, making China

the fifth-largest US beef buyer.

Total outstanding sales for 2021

amounted to 409 Mil Lbs, 130% of

last year and the largest on

record. At the start of the year,

US beef exports' outlook is

bullish for US beef/cattle

outlook. China looks to remain a

large destination for US exports,

at least through the first half of

the year, while other traditional

buyers such as Japan and Hong Kong

hold steady. Also worth noting is

sales to S Korea of 113 Mil Lbs

are 43 Mil Lbs (62%) larger than a

year ago.






** AgResource Corn Comment and Analysis ** Jan 8, 2021

4:30 PM CST

CBOT Corn Rallies Further on Drier Argentine Forecast; Next Week to be

Volatile: CBOT corn futures slightly higher, with calendar spreads tightening

further. Friday’s rally was based mostly on the midday GFS stripping rainfall

from Central Argentina. Meaningful rainfall over the next two weeks will stay

isolated to areas just north of the primary corn belt.

ARC’s long-term outlook stays bullish but a boost in volatility is expected

following the release of the USDA’s January data. It’s residual disappearance

that’s difficult to forecast, and NASS stocks reports in 2020 were

consistently a shock to the marketplace. However, any break next week will be

absorbed rapidly. US corn is the cheapest

feedgrain both domestically and globally.

The trade’s Argentine production estimates

are clustered around 47 MMTs, but a crop

closer to 40-42 is probable without a major

and immediate weather pattern shift. Short

soil moisture in Central Brazil is a

growing risk to safrinha production.

Larger than expected residual

disappearance and reduced yield be taken as

rather bullish as the stocks/use vs. price

curve begins to turn more vertical. ARC

sees fair value at $4.90-5.30 through the

balance of winter.

** AgResource Soybean Comment and Analysis ** Jan 08, 2021

4:30 PM CT

Soybeans Press to New Highs on Renewed Export Demand: Soybean futures rallied

to end the week following a USDA export sales announcement of 7.5 Mil Bu of

soybeans to China. The sales are thought to be for late summer shipment as

Brazilian soybean offers for August are now more than $1.40/Bu.

The sales announcement lifted March soybeans to new contract highs, though

soy product markets failed to keep up. CBOT soy crush spreads closed down

$.03-.09/Bu for the day, with the largest decline in March.

The CoT report showed that funds sold close to 21,000 contracts and cut

their net long soybean position to the lowest since early September. Hedgers

bought back just over 22,000 contracts,

lifting the net short to 314,000

contracts or back above the previous

record short.

Funds were also sellers of 5,000

contracts in soybean meal and 72

contracts in soybean oil. The soybean oil

position is just under the 12 month high.

Today’s export sales announcement

affirms that US prices have yet to reach

a level that rations supply. Quieter

trade is expected ahead of next week’s

USDA reports, and our view stays bullish

on any post-report break.






** AgResource Hog Comment & Analysis ** Jan 8, 2021

4:30 PM CDT

Early Hog Rally Stalls, Futures End Weaker: CME hog futures marked new highs in

early trade and then turned down on profit-taking ahead of the weekend.

The cash hog index rose $.54 to $62.96 versus Feb hogs just under $69. The

Prior Day Slaughter report indicates a $.38 gain for Monday.

The pork cutout closed out the week with a $1.18 increase to $81, back over

$80 for the first day since late November.

The CoT report showed that funds bought 3,300 contracts last week, lifting

their net long position to a 5-week high of 37,000 contracts. The fund position

peaked in October at 42,000

contracts had has slowly worked

lower but held in a narrow 2,000

contract range. Note in the chart

that typically, funds are either

building or liquidating their

position and rarely spend much time

consolidating. A push back above the

long-term downtrend line would

signal the start of the next fund

led rally.

AgResource maintains a view of

using a strong rally in early 2021

for summer hog sales. June back to

$87-90 should be sold.

** AgResource Wheat Comment and Analysis ** Jan 8, 2021

4:30 PM CST

Lack of Wheat News Allows for Profit Taking; World Cash Market Firms: CBOT

wheat futures ended slightly weaker amid a real lack of fresh input. Black Sea

market participants remain on holiday, and so uncertainty over exactly where

the Russian fob market is continues. Managed funds on Tuesday were net long

25,000 contracts in Chicago – an 8-week high. Modest profit taking has

occurred in the last 3 sessions.

ARC’s research continues to suggest that breaks into spring will be short

lived. Milling wheat futures in Paris on

Friday ended higher. European wheat’s

interior basis trend is positive into

harvest. Most important is that European

export commitments as of early Jan sit

at 13.3 MMTs, down just 6% from a year

ago. The USDA predicts EU exports in

20/21 to be down 30% year-over-year –

and still EU wheat stocks/use will be

historically tight. The EU wheat market

must work to slow exports.

Global cash market guidance will remain

positive into spring. Breaks provide

opportunities for end users to extend Q1

supply coverage. Chart-based support

lies at $6.30-6.35, March CBOT.






** AgResource Ag Investment Trades ** Jan 8, 2021

4:30 PM CT

4:30 PM CDT

----- 766 Closed Trades since March 1, 2004 for a net gain of $306,437.00 ----

** AgResource Ag Speculative Advice for Monday: 1/ No new advice.

“Entry Date" "Positions and Current Open Position Recommendations"

------------- -------------------------------------------------------------

8/13/2020 Long 2 Dec ’23 corn/Short 2 Dec’22 corn at 2.5 cents. Hold.

10/29/2020 Long 2 Nov ’21 soybeans at $9.61, risk a close below $9.82

Multipl Long 4 July corn futures/Short 4 ’21 Dec corn futures at a $.24

July premium. Hold.

11/25/2020 Long 2 March corn futures at $4.325 from December roll. Hold.

12/02/2020 Long 2 March $12.00 soybean calls/Short 2 March $11 soybean

puts at $.14. Exited 2 short $11.00 March puts at 1.50 cents.

Hold 2 Long 2 March $12.00 soybean calls at a cost of $.155.

12/07/2020 Long 2 March corn at $4.185, stops on close below $4.21.

12/08/2020 Long 2 March $13.00 soybean calls at $.115. Hold.

12/22/2020 Long 2 March soyoil at $39.60. Hold.

12/29/2020 Long 2 March $14.00 soybean calls at 8.25 cents. Hold.

** AgResource Farm Hedge/Cash Positions ** Jan 08, 2021

Date Position %Hedged Explanation Exit/Stop

===============================================================================

---------------------2018/19 AgResource Cash Sales Advice ---------------------

Wheat Sold 100% of production at $5.21 average spot CBOT.

Corn: Sold 100% of production at $4.195 average spot CBOT.

Soybean: Sold 100% of production at $9.76 average spot CBOT.

------------------- 2019/20 AgResource Cash Sales Advice --------------------

Corn: Sold 100% of production at $4.015 basis Dec’19/Mar/Jul futures.

Wheat: Sold 100% of production at $5.51 Jul/Dec/Mar ‘20 futures.

Soybeans: Sold 100% of production at $9.53 basis Jan/Mar/May’20 futures

---------------------2020/21 AgResource Cash Sales Advice ------------------

Corn: Sold 80% of estimated production at $4.01 basis Dec’20/Mar‘21 futures

Bought 40% crop; Long $4.20 March call at a cost of a $.0125 credit from spread

Soybeans: Sold 80% of estimated production at $9.465 basis Nov’20/Mar’21 futures

Bought 40% crop; Long $10.80 March soybean call at $.055. Hold.

Bought 40% crop: Long March $13.00 soybean call at $.095. Hold.

Wheat: Sold 100% of estimated production at $5.50 basis July/Sept/Dec/Mar Chi

Livestock Feeders: Covered 50% of ‘21 corn/meal needs in cash market at $3.97

basis March CBOT corn futures and $356/MT March CBOT soymeal futures.

------------------2021/2022 AgResource Cash Sales Advice -------------------

Corn: Sold 30% of estimated production at $4.115 basis December ’21 futures.

Short May $4.00 corn puts at $.13 against 100% Dec corn sale as a hedge.

Wheat: Sold 50% of estimated production at $5.505 basis July ’21 Chi futures.

Soybeans: Sold 20% of estimated production at $9.18 basis November ’21 futures.

Documents

AgResource Company Aires, Cordoba and Santa Fe, precipJan 08, 2021 · Covid caused a sag from April through July. US beef e xports to major destinations were above last year. The