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Large Open Interest Remains in Dec Corn Options

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Good Morning! From Allendale, Inc. with the early morning commentary for November 24, 2017.

Grain markets will be looking for action today based on where prices are near the close due to option expiration. Grain markets close at 12:05 today.

December corn options have over 50,000 open at the 3.50 strike when combining the puts and calls. The 3.45 strike has over 18,000 open interest combining puts and calls. One would expect some active volume today as option traders move to futures. Contact your Allendale Broker to discuss your situation.

Weekly Export Sales report will be released at 7:30 this morning. Trade estimates are: wheat 350,000 to 550,000 tonnes, corn 900,000 to 1,100,000 tonnes, soybeans 1,000,000 to 1,400,000 tonnes, soymeal 100,000 to 300,000 tonnes and soyoil 0 to 22,000 tonnes.

CFTC report will be released on Monday due to the holiday.

European Union soft wheat exports in the 2017/18 season that started on July 1 had reached 8.1 million tonnes by Nov. 21, down 20 percent from 10.1 million tonnes exported by the same stage last season. Maize imports came to 5.5 million tonnes, 64 percent above the 3.4 million imported by the same stage last year. (Reuters)

Argentina's agriculture ministry released projection for 2017/18 wheat harvest to be 18 million tonnes. They are expecting 8.8 million hectares to be planted to corn compares to 8.92 million hectares previously projected. Soybean area is forecast to be 16.8 million hectares.

Funds were estimated to have been net buyers of 5,500 contracts of corn and 7,000 contracts of soybeans on Wednesday. They were thought to have been net sellers of 1,500 wheat contracts.

China's largest pig farming companies and new entrants are racing to build vast, modern hog farms in the north-eastern cornbelt, expanding the world's biggest pork market and upending traditional trade flows in meat and grain. At least eight listed companies have announced or confirmed plans to produce around 17 million pigs annually in the north-east in coming years. Many more companies, including the country's biggest pig farmer, Guangdong Wen's Foodstuff Group Co Ltd, are building farms in the area, suppliers and sources say, adding to China's annual $1 trillion pork market. Some researchers expect output in the northeast to hit nearly 120 million pigs a year, almost double the 69 million head produced in the area by Heilongjiang, Jilin, Liaoning and Inner Mongolia provinces last year. (Reuters)

Cash cattle trade is mostly complete for the week at steady to lower prices. However, with strength in product and possibly short bought packers we would have to expect steady to higher prices next week.

December live cattle futures gapped higher on Wednesday leaving important support levels. Look for two-sided choppy action today in a shortened session.

Cash hogs and product values have been a supportive factor in relieving the oversold condition in the lean hog futures. Look for support on breaks today.

Dressed beef values were mixed with choice up .38 and select down .01. The CME Feeder Index is 156.58. Pork cutout value is up 1.11.

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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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