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Wet Weekend Pushes Markets Through Key Resistance Levels

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Good Morning from Allendale, Inc. with the early morning commentary for October 8, 2018!

Grain Market Traders had a week of strong market action with December corn up 11.75 cents, November soybeans up 23.75 cents and December wheat up 11.5 cents. Traders will continue to watch the skies and see how much weather will affect harvest while also digesting the large numbers estimated from the USDA October Supply/Demand report on Thursday.

Crop Progress Report will be released this afternoon at 2 p.m. CST. Trade is looking for corn harvest at 32-35% complete (26% last week) and soybean harvest at 32-35% complete (23% last week). Winter wheat planting expected at 57-59% complete (48% last week).

Weather Forecasts accurately predicted the weekend weather with significant rain throughout most of the Midwest raising concerns about corn and soybean harvest. Although ahead of normal pace, crops are showing signs it could fall behind. Soybeans are most susceptible to damage when ripe crops are hit with prolonged rains and cool temps.

Managed Money Funds in corn, soybeans, wheat, soybean meal and soybean oil are combined net short -139,000 (-237,000 last week). Managed funds corn short positions shrunk 55,000 last week to a net -58,000 short contracts, soybean short positions fell 14,000 last week to a net -44,000, wheat long positions increased 11,000 last week to a net -12,000 contracts, soybean oil short positions dropped 34,000 last week to a net -51,000 contracts and soybean meal long positions were down 5,000 last week to +26,000 long contracts.

USDA October Supply/Demand Report will be released on Thursday, Oct. 11, at 11 p.m. CDT. USDA estimates have corn ending stocks at 1.919 billion bushels (1.774 billion bushels in September), soybean ending stocks at 0.898 billion bushels (0.845 billion bushels in September) and wheat ending stocks estimated at 0.950 billion bushels (0.935 billion bushels in September).

AgRural announced Brazilian soybean farmers have planted 10 percent of the 2018/19 crop season (5 percent at this time last year) due to favorable weather conditions.

Initial Claims, Continuing Claims, CPI, Core CPI, and Consumer Sentiment reports will all be important to markets later this week. Look for analysts to submit estimates as the reports approach.

December Live Hogs traded sharply higher closing up $2.05 at $57.55. The next level of resistance is at $59.15 with support at $53.82.

December Live Cattle closed $0.25 lower closing below critical resistance at the $119 level, support remains at $116.62.

Dressed Beef Values were lower with choice down 0.61 and select down 0.24. The CME Feeder Index is at 158.18. Pork cutout value was down 0.35.

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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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