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Wetter, Cooler Weather Reaffirms Correction

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Good Morning from Allendale, Inc. with the early morning commentary for July 19, 2019.

Grain markets are higher after a choppy day of trading on wetter, cooler weather while export data showed China had canceled purchases of 9,853 metric tons of soybeans for the first time since April. Corn and wheat futures settled lower as well on improved crop growing conditions and selling pressure with light trading volume.

Weather forecasts continue to move markets, and we're set to get the latest from Drew Lerner or World Weather, Inc. during our annual Ag Leaders Summer Conference next week. It all begins Tuesday at 2:00 PM CDT. Register online, or call Zach at 800-262-7538 for best pricing.

Weekly export sales showed corn sales of 333,000 tonnes (estimated 350,000 to 800,000 tonnes), soybeans at 326,300 tonnes (estimated 100,000 to 700,000 tonnes), wheat at 347,300 tonnes (estimated at 200,000 to 400,000 tonnes), soymeal at 214,800 tonnes (estimated at 50,000 to 300,000 tonnes), and soyoil at 13,700 tonnes (estimated at 5,000 to 50,000 tonnes). Beef export sales at 19,792 tonnes (42% over last year in the same week) and pork sales at 30,107 tonnes (53% over last year in the same week).

U.S. & Chinese officials are speaking, potentially paving the way for in-person trade talks to resume, U.S. Treasury Secretary Steven Mnuchin said. "Right now were having principal-level calls and to the extent that it makes sense for us to set up in-person meetings, I would anticipate that we would be doing that," said Mnuchin.

Funds were estimated sellers for the third straight session, selling 28,000 corn contracts, 1,000 soybeans, 7,000 wheat, 2,000 soymeal, and 1,000 soyoil.

China made its largest purchase of U.S. sorghum since this April last week, according to USDA data. China bought 51,072 metric tons of sorghum even though a 25% tariff will be applied. The purchases will likely be used to feed livestock or make a Chinese liquor called baijiu.

Cattle on Feed and Cattle Inventory reports (for June) will be released today at 2:00 PM CDT by the USDA. We estimate Cattle on Feed as of July 1 at 100.9% of last year, Placements at 93.2%, and Marketings at 98.3%. For Cattle Inventory, we estimate All Cattle at 99.9% of last year.

Cold Storage will be released Monday at 2:00 PM CDT. We estimate end of June pork stocks at 594.548 million pounds. Beef stocks are estimated at 388.791.

October and December lean hog contracts pushed to new highs during yesterdays trading session but failed to make it a new high close with October lean hog futures closing at $76.92.

Dressed beef values were higher with choice up 0.77 and select up 0.27. The CME feeder index is 140.00. Pork cut-out values were up .12.

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Allendale Inc. was established in 1984 in a country grain elevator located in Crystal Lake, Illinois. The first-hand experience with agricultural and financial markets has worked with Allendale’s combined foresight, ingenuity and expertise to make it the successful firm that it is today. Allendale’s goal is to provide its customers the expertise and service they need to grow their agricultural businesses. Allendale’s staff is called on to provide their commentary for TV, radio and newswires on a daily basis.

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