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The Main Event: USDA Report at 11:00 CT

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Good Morning! From Allendale, Inc. with the early morning commentary for November 9, 2017.

Grain markets are coiling ahead of the USDA report today at 11:00 am CT. US stock market continues to bounce off any setbacks giving bulls continued enthusiasm. The outside day down on Wednesday may impact traders confidence if not taken out on the upside by weekend.

Reuters analysts estimate for todays USDA report:

Average trade estimate14.333172.483.1034.40849.389.486
Highest trade estimate14.459174.083.2004.46749.989.500
Lowest trade estimate14.250171.783.0004.37548.989.400
USDA October14.280171.883.1194.43149.589.471
After the report weather takes center stage as we finish harvest in the US and row crops begin the growing season in South America.

World Weather Inc. says, The GFS model run in the United States increased precipitation across much of the Corn Belt, southern Missouri, and northern Arkansas Tuesday through next Wednesday. In week 2, precipitation was increased across much of Arkansas, Louisiana, Mississippi, and southeastern Oklahoma Nov. 16-18.

Argentina's Rosario Exchange raised its 2017/18 corn crop estimate to at least 41.5 million tonnes versus earlier estimate of 41 million tonnes. They put Argentina's 2017/18 soy crop estimate at 54.4 million tonnes vs 54.5 million tonnes.

Weekly ethanol production totaled 1.057 million barrels per day last week slightly above previous week. The year to date production pace is 3.3% over last year. USDAs whole-year goal is only for a 0.7% increase.

October Chinese soybean imports totaled 5.86 million tonnes. Their imports are always low in October. More important, this was 12.4% over last year! It was also a new record for October. The previous record, was 5.5 mmt which was made two years ago.

Funds were estimated to have been light net buyers in grains. They were net buyers of 2,000 corn, 2,500 soybeans and 500 wheat contracts on Wednesday.

U.S. crude oil stockpiles rose unexpectedly last week as imports jumped, exports tumbled, and production inched up to its highest since at least 1983, says the Energy Information Administration.

Fed Cattle Exchange traded cattle at 124 and after that auction closed majors pulled 124 bids and went to 122. Feedlots will have a decision to make before the weekend.

December futures saw some fund liquidation and profit taking as fed cattle bids are lowered. Technical support in the December contract is current in the chart gap left on October 30th which would be filled at 121.62. the 20-day moving average comes in at 120.67 today.

Goldman Roll is influencing spreads in the livestock complex which we can expect more of, with 3 days left in the roll.

Cash hogs and pork product continues to slide. Futures have rolled over now and have closed lower 6 days in a row.

December lean hog futures contract closed below the 20-day moving average for the second day. Technical support crosses at 63.00 with resistance at 65.00.

Dressed beef values were higher with choice up .49 and select up 1.13. The CME Feeder Index is 159.01. Pork cutout value is down .37.

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About the author

Paul Georgy serves as president/CEO of Allendale, Inc., a worldwide agricultural advisory and research firm that provides agricultural commodity price research and risk management alternatives for producers, major food companies, international corporations, foreign governments, and major news vendors.

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