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Weather Forecast Provides Hope for Midwest Farmers

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Good Morning! From Allendale, Inc. with the early morning commentary for April 16, 2018.

Grain markets are mostly lower as bears point to the drier weather on the way for the Midwest and the larger than expected net long positions by funds. The bulls are concerned about the potential delay in planting of US row crops. Guesses for todays planting progress report is only 5% corn and spring wheat. Politics and weather will be the major factors influencing this weeks grain and soybean prices.

World Weather Inc. says U.S. precipitation events next week should be weaker and fewer in number resulting in some needed drying for the northern Plains, Canadas Prairies and the U.S. Midwest, Delta and southeastern states

CFTC Commitment of Traders report released on Friday afternoon showed managed money funds increasing their net long positions in corn by 34,700 contracts to 174,887. They also added were net sellers of 4,937 contracts in soybeans leaving them net long 176,217. Funds bought 18,546 contracts of wheat but remain short 54,872 contracts.

NOPA Crush for March is estimated at a record 168.3 million bushel which is 2 million bushels over prior 12/17 record. Oil stocks are forecast at 1.962 billion pounds versus 1.815 billion pounds last year.

Brazils soybean harvest is 87% done while Argentina harvest for corn and soybean harvest is thought to be 25% complete.

U.S. economic markets this week will focus on relief that Saturday's U.S. military attack on Syria is over and the expected exchange this week of additional sanctions between the U.S. and Russia. Trade will also be watching for any developments on the U.S.-Chinese trade tensions.

Managed money funds were net sellers of 9,395 live cattle contracts and 5,030 lean hog contracts. Commitment of Traders report has managed money funds net long 27,255 cattle and net short 1,495 contracts.

Cash cattle markets rallied sharply late on Friday as packers prepared for the blizzard that hit the plains and upper Midwest over the weekend. The number of cattle in feedlots, still has cattle traders concerned about the potential wall of cattle coming to market over the next few months.

June live cattle futures has support at 101.20 and resistance at 105.17.

June lean hog futures rallied $4.37 last week. Chart resistance crosses at 79.00 with support at 75.00.

Dressed beef values were mixed with choice up .13 and select down .76. The CME Feeder Index is 136.42. Pork cutout value is up .27.

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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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