DEC CORN

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As harvest winds down, the mkt is buffeted back & forth by ‘trade war headlines” and daily updates on the South American growing weather! Clearly the 800 POUND GORILLA in the room is the trade deal & its ultimate resolution!  The grains have languished thru the trade uncertainty but the DJI makes record highs daily on “trade optimism” – that bodes well!

FACTORS IMPACTING THE MKT

• EXPORTS – Mon Inspections were 637,397 (400-700) & Fri sales were 581,000 (400-800)
  19 Nov  –  191,000 MT –   Unk
  18 Nov      132,000 MT –   Unk
  8  Nov       217,040 MT –  Unk

• HARVEST PROGRESS- corn is 76% in (lw-66 avg-92)   Ill – 80 (97)   Ind – 80 (91)   Iowa – 77 (93)   Ohio – 75 (97)  all but in – and as usual, the last 25% will be the hardest to get in & the worst yielding

• US/CHINA TRADE DEAL – a quintessential “headline event” with the mkt “ebbing & flowing” almost every day – off the latest news or tweets – positive or negative – coming out of DC or China! Of course, everyone has an opinion – ours is it will happen before year’s end!

• NOV CROP REPORT – our last from the USDA until the January Final – has pegged production at 13.661 (ly- 14.420) & yield at 167.0 (168.4)

• BIG SHORT POSITION – many are “beared up”, but if they’re wrong, they’ll contribute big-time to a turn-around rally!

• LOW PRICES CURE LOW PRICES!! Prices have declined to levels that could augment feed usage, ethanol demand & exports!

• HARVEST IS ALMOST OVER – which will remove one bearish fundamental from the equation!

They’ve thrown everything at this mkt but the kitchen sink -it needs a catalyst to rally – a trade deal, South American weather issues or an export surge!!

 

JAN BEANS

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Jan Beans have steadily eroded in November – due to a gridlock on trade talks – and despite  excellent weekly exports & a general wind-down of harvest pressure (91% in)! Technically, the mkt is reaching a 50%-60% retracement level from Sept (860-960)! Selling the mkt at this time of the year at these price levels – doesn’t seem prudent! The producer sure isn’t doing it – the mkt will to rally to release any grain from the bins!!

 

DEC WHT

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Dec Wht is up about 6 cents for the month – reflecting a truly sideways, trading range mkt where negatives are offsetting positives – resulting in a mkt currently going nowhere!  Exports have been mediocre, the price level could attract exports, the Winter Wheat crop is ok, the trade deal is hanging in the balance & Global carryout is burdensome! It all adds up to SIDEWAYS – as the above chart indicates!!

 

DEC CAT

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After a stellar upside run of over $20, pundits are calling for a top – The Feb Cat Contract is $10 premium to cash (normal is $3) & the Friday Cattle-On-Feed is reported to show placements of 11-12% over last year. But  the mkt stubbornly hangs in there – fed by a strong cash mkt! The trend still is your friend!!

 

DEC HOGS

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On the other end of the spectrum is Dec Hogs – who have been trying to carve out a seasonal low – riding the hopes of huge export potential – contingent on a trade resolution – but failing that, have succumbed to the short-term pressure of record high weekly slaughter! The disappointing result is new lows for the move – as the contract heads for the contract lows scored in mid-Sept!!

 

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