JAN BEANS

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The uncertainty of the Presidential Election forced a 40 cent correction (1090-1050) but the mkt immediately rebounded for a 70 cent recovery (1050-1120) off the positive supply/demand fundamentals of a dry South America & a stellar export pattern! And tomorrow is the Nov USDA Report at 11am with slight reductions expected in production 4.253 bb (Oct – 4.268) & yield 51.7 bpa (Oct – 51.9). The Biden victory coupled with the republicans continued control of the Senate could bode well for the mkt – with a continuation of Trumps favorable farm & economic policies expected – and a “kinder, gentler” Commander-in-Chief in charge!

DEC CORN

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Dec Corn likewise corrected in advance of the election – recovering afterward to resume trading over $4.00!  Harvest for both corn & beans is all but complete at over 90% for both crops!  Tomorrows WADSE Report is expected to lower production – 14.645bb (Oct-14.7) & yield 177.5 (Oct-178.4)!  We don’t expect any sudden, dramatic changes in gov’t AG Policy – Trump’s worked very well – “if it ain’t broke, don’t fix it”! Going forward, the key fundamentals will be the El Nina weather pattern in South America & China’s voracious, unrelenting appetite for our grains! And also maybe a big assist from the Macro Mkts! For instance, today’s DJI is up 1500 points off a possible Covid vaccine & a lower US dollar will be very advantageous for US Exports!

DEC WHEAT

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Dec Wht did not follow Dec Corn & Jan Beans higher on the post-election rally – impeded by a stronger dollar and improving crop conditions (gd/ex up 2%)! Barring a surprise bullish report from the USDA on 11-10 at 11am, the contract will struggle to rally in the next few weeks – even if its “sister mkts” do!

DEC CATTLE

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The positive vaccine news yesterday not only enabled a 1500 point rally in the DJI but also spiked the Dec Cat to an over-$3.00 rally – with the promise of increased restaurant & travel demand in early 2021! Along with the bullish news was an increase in cut-out to the highest level since Oct 16! However, the mkt must still overcome short-term negatives including a record high steer weights & the resulting increased slaughter ahead!

DEC HOGS

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Yesterday’s price action was disappointingly anemic – in the face of a 1500 point rally in the DJI & a $3.00 surge in Dec Cat – off the vaccine news! The culprits appear to be three-fold – much less China pork imports in 2021, increasing near-term slaughter & the rising feed costs (corn & meal)! These fundamentals may confine Dec Hogs to a short-term trading range!!