COVID Concerns Rise | November 19, 2021

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Grain and soy complex futures traded both sides of unchanged overnight but have softened to a weaker tone and session lows this morning amid a rise in Covid concerns (see next item). As of 6:30 a.m. CT, corn futures are trading 4 to 5 cents lower, soybeans are 7 to 8 cents lower and winter wheat futures are 4 to 6 cents lower and spring wheat is mostly 2 to 4 cents lower. Front-month crude oil future are more than $2.50 lower, while the U.S. dollar index is around 400 points higher.

Surging Covid cases in Europe are back on the front burner of the marketplace to close the week. Austria on Monday will become the first country in western Europe to reimpose a full Covid lockdown. Germany warned it may follow suit.

The Congressional Budget Office (CBO) estimated the Build Back Better (BBB)/social spending package would increase the deficit by a net $160 billion over 10 years, which would be counter to President Joe Biden’s pledge that the legislation would be deficit-neutral. The measure would provide $82 billion in ag spending, including $27 billion in new conservation funding. It would also provide several billion dollars through the Commodity Credit Corporation for environmental quality and stewardship incentives.

China must address financial risks in a "clear and coordinated fashion" and temporarily shift its fiscal policy to a neutral stance from the contractionary approach, the International Monetary Fund (IMF) said. “China’s recovery is well advanced, but is unbalanced and momentum is slowing,” IMF said.

European Central Bank (ECB) President Christine Legarde reiterated her previous view that “conditions to raise rates are very unlikely to be satisfied next year” and that the ECB would not “rush into premature tightening” of its monetary policy.

The Biden administration Thursday released a long-awaited proposal regarding wetlands protections. The proposal partially restores the pre-2015 definition of the Waters of the United States (WOTUS) under the Clean Water Act.

USDA’s Cattle on Feed Report at 2 p.m. CT is expected to show feedlot inventories down 0.2% as of Nov. 1. October placements are expected to come in 2.2% higher than year-ago, while marketings are likely to be down 3.7%, according to a Reuters survey. Cash cattle traded another $2 to $3 higher this week as packers raised cash cattle bids in an effort to fill out aggressive slaughter schedules over the next month.

December lean hog futures finished Thursday virtually in line with the cash index, meaning price action in the lead-month contract over the next three weeks is likely to mimic day-to-day movement in the cash market.



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