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Traders Watch South American Forecast

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Good Morning! From Allendale, Inc. with the early morning commentary for November 28, 2017.

Grain markets continue to watch weather forecasts for South America for the markets next direction. Equities touched new highs yet again yesterday as Black Friday and Cyber Monday sales broke records.

Corn harvest advanced to 95% complete from last week's 90% according to the USDA yesterday afternoon. Analysts were expecting 96%. Winter wheat was reported 50% good-to-excellent, the average estimate was 51%. Winter Wheat was also reported 92% emerged.

French President Macron has asked the French government to take the steps necessary to ban Glyphosate in France within three years, or as soon as possible.

Below-average rain in the first two weeks of December will complicate planting of late-sowed corn and soy in most of Argentina's central grains belt, meteorologists told Reuters on Monday. After abundant rains in the first half of the year, the southern hemisphere spring - which began in September - has brought lower-than-normal precipitation to the world's No. 3 corn and soybean exporter. While that has benefited flooded farms, dryness could spell trouble for the 2017-18 harvest. (Reuters)

Weekly Commitments of Traders reported managed money funds as net buyers of 20,090 contracts of corn through November 21st. That left them net short 210,466 contracts. In soybeans, they were sellers of 2,406 contracts to be net long 20,144. They also sold 90 wheat contracts and were short 108,666.

AgRural estimates Brazil's soybean planting at 84% complete, up from the previous week's 73% estimate. This number is over the 79% five year average by this point. They suggest the top state of Mato Grosso is 96% planted.

Export inspections for the week ending 11/23/2017 reported wheat exports of 344,721 tonnes, corn 638,711, and soybeans of 1,578,592 tonnes.

Thursday is the First Notice Day for December grain contracts. Positions in December grain futures still open as of tomorrow's close are applicable for delivery tenders.

A federal court in Mexico rejected an appeal by PHI Mexico to lift the ban on GMO corn. The appeals court claimed it did not have authority on the matter. This will kick it up to the Supreme Court. Mexico only allows scientific permits for GMO cultivation on areas up to 1 hectare, 2.5 acres.

Managed money funds were estimated sellers of 13,000 corn contracts, 5,000 wheat, and 6,000 soyoil in yesterdays trade. They were estimated buyers of 4,000 soybeans, and 4,500 soymeal.

Consumer Confidence tops the list of economic reports due today at 9:00 AM CST. S&P Case-Shiller Home Price Index will also be released today.

Cattle Showlists were down 10,300 from last week. This would be supportive. Last week's actual free market sales were only 73,369. That is under the previous week's 94,070 and last year's Thanksgiving week of 104,194.

End user purchases of beef for extended delivery ran 27% under last year during the Thanksgiving week. That was a Thanksgiving 2017 to Thanksgiving 2016 weekly comparison so the numbers are valid.

Managed money sold 8,295 Live Cattle contracts through the 21st to trim their long position to 123,535. They sold 9,243 Lean Hogs and were net long 63,990.

Dressed beef values were lower with choice down 1.42 and select down .57. The CME Feeder Index is 155.26. Pork cutout value is up .26.

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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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