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First Notice Day Causing A Stir

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Good Morning! From Allendale, Inc. with the early morning commentary for November 29, 2017.

Grain markets are quiet. Technical indicators are in an oversold condition in corn and wheat which suggests a rally could occur at any time. Stock indexes take the spotlight in trading futures as they set new all-time highs.

First notice day for deliveries against the December futures contract is tomorrow. This is causing liquidation of long positions in the December contract by moving them to a deferred or just getting out. Producers are also having to price grain contracts before December 1st.

Weather has been open and allowing the final acres of the 2018 crop to be harvested. Farmers are having to find on farm storage or move to the elevator providing more weight on the market.

Historically a bright spot in grain prices comes simply from lack of farmer selling once harvest is complete and grain is in storage. Farmers, typically will not move grain for a few weeks for price or tax reasons. Therefore, an improvement in basis or in futures prices ensue during this period before grain is delivered in the New Year. However, one would have to expect the rally this year may not be as much as needed to satisfy the marketing goal due to the large supply.

U.S. farmers are likely to expand plantings of both corn and soybeans while reducing wheat seedings for the upcoming marketing year, according to the Baseline Report from the U.S. Agriculture Department.

Brazil's soybean planting progress catches up to average while their 1st crop corn planting continues to run a bit behind average.

Funds were estimated to have been net sellers of 9,500 corn contracts, 3,000 soybeans and 500 wheat contracts on Tuesday.

Corn bids were higher at an Illinois River terminal and a Nebraska processor, supported in part by a contract low in December corn futures and lack of farmer selling.

Virtual currency bitcoin soared to an all-time high above $10,000 on Tuesday on some smaller exchanges and digital currency indexes, but remained just below that milestone in major trading platforms such as Luxembourg-based BitStamp. (Reuters)

Fed Cattle Exchange has 987 head being offered at auction this morning at 10:00 am CT. Trade is waiting for someone to show their hand. Expectations are for a steady to maybe higher trade this week as packers pull from a smaller showlist.

December live cattle options will go off the board on Friday and the first notice day for December live cattle futures is Monday. This week's cash price will determine the chances for deliveries.

February live cattle futures are caught between the 20-day (127.02) resistance and 50-day (123.70) support moving averages.

Pork demand continues to drive the excitement in cash hog pricing and futures contracts. The large weekly production of pork has not showed a buildup in pork supplies.

Feeder prices are red hot as producers can pencil in a profit due to cheap feed costs and strong futures prices.

February lean hog futures bounced off the 20-day average at 69.85 on Tuesday which is now support. Resistance crosses at contract highs, 73.30.

Dressed beef values were lower with choice down .94 and select down .08. The CME Feeder Index is 155.26. Pork cutout value is down .35.

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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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