Corn crop estimate: 13.661 bil. bu.USDA trimmed its corn crop estimate 118 million bu. from last month. It cut the national average yield estimate by 1.4 bu. to 167 bu. per acre. USDA left its harvested acreage esti-mate at 81.815 million acres. The objective yield data showed a roughly 200-ear reduction in ear counts and a modest decline in ear weights from last month. Given the heavy per-centage of corn that was still in fields at the time of USDA’s November survey, we anticipate ear counts and ear weights will decline further in USDA’s final estimate in January.

Bean crop estimate: 3.550 bil. bu.USDA’s soybean crop estimate is virtually unchanged from last month. It kept the national average yield at 46.9 bu. per acre and made no adjustment to harvested acres, which are estimated at 75.626 million acres. The objective yield data showed a slightly lower pod count in 18 square feet, but the implied pod weight increased modestly from last month. Given the late-season weather struggles, we anticipate pod counts and pods weights will decline in the final estimate in January, though probably not as much as many will expect.

Cotton crop: 20.817 mil. balesUSDA cut its cotton crop estimate 888,000 bales from last month. The national average yield was slashed 34 lbs. per acre. Harvested acres were unchanged at 12.509 million acres. USDA cut its Texas yield estimate by 56 lbs. per acre. It Georgia yield estimate was unchanged.

All-wheat crop: 1.920 bil. bu.After resurveying other spring wheat and durum acreage and yields, USDA cut its all-wheat crop estimate by 42 mil-lion bushels. The other spring wheat crop estimate was lowered nearly 38 million bushels. USDA trimmed its other spring wheat yield by 0.1 bu. and lowered harvested area by 775,000 acres. USDA cut its durum crop estimate by nearly 4 million bushels. The average durum yield was increased 0.9 bu., but harvested acres were lowered 115,000 acres from the previous estimate.

Corn gets a boost from November crop reports — Struggling export demand gave funds fodder to extend short positions in the corn market ahead of Friday’s USDA reports. But the report data triggered a friendly price reaction. Corn futures were still lower for the week. Funds are willing to be long soybeans, but the market could do little more than drift sideways ahead of the reports, as traders remained focused on the back-and-forth China trade situation. Wheat futures also showed little net movement for the week and had a limited reac-tion to USDA’s report data. Cattle futures paused, despite additional strength in the cash mar-ket, as big premiums were already priced into the market. Hog futures continued their volatile back-and-forth trade, though the market showed little net price movement for the week.

Phase 1 deal hinges on tariff liftingChinese officials say the U.S. and Beijing have agreed to roll back tariffs as part of the Phase 1 trade agreement. But President Donald Trump said Friday he has not agreed to reduce tariffs. Michael Pillsbury, a Trump trade adviser, says “Neither the Chinese nor the White House have developed a specific list or a series of quid pro quo [for specific tariff removal] — yet. He says the two sides cancelling tariffs at the same time and proportionately is “an important condition for reaching an agreement.” We’ve learned not to assume any-thing until actual language of an accord is released.

Second MFP 2 payments authorizedUSDA Secretary Sonny Perdue says the second installment of Market Facilitation Program (MFP 2) payments should go out to eligible farmers later this month or in early December. While Perdue said the pending trade deal with China could make additional payments unnecessary, most sources believe the third MFP 2 installment will be made.

Chinese soybean imports declineChina imported 6.2 million metric tons (MMT) of soybeans in October, down 10.7% from last year and the least since March. For the first nine months of 2019, China imported 70.7 MMT of soybeans, down 8.1% from last year. However, China’s ag ministry raised its 2019-20 soybean import forecast by 2.2 MMT to 86.2 MMT, which would be up 3.6 MMT from 2018-19.

Weak Chinese data better than fearedChina’s exports dropped 0.9% from year-ago last month and its imports fell 6.4%. China’s overall trade surplus rose to $42.81 billion, with its U.S. balance widening to $26.42 billion.

Congress nearing a vote on USMCA? Rep. Collin Peterson (D-Minn.) told us in an interview a vote on the U.S.-Mexico-Canada Agreement (USMCA) could come as early as this week. A vote on the trade pact is more likely in late November or December, as other lawmakers have indicated — but it should come yet this year.

News this week...2 — Consultant trims South American crop estimates.3 — A plethora of livestock, meat market news.4 — Breaking down USDA’s November S&D Report.

November 9, 2019 Vol. 47, No. 45

Go to ProFarmer.com

November 9, 2019 / News page 2

Follow us on Twitter:@BGrete@ChipFlory

@JWilson29@MeghanVick

@DavisMichaelsen@DoaneAg_Nelson

@RobHatchett1@DoaneAg_Vaught

‘Midwest Crop Farmers’ Perception of the U.S.-China Trade War’The Center for Agricultural and Rural Development at Iowa State University recently published results of a survey it took of crop farmers in Iowa, Illinois and Minnesota relative to their views on the prolonged U.S./China trade war. Following are key results from the survey:

• Nearly one-quarter (22%) of respondents were strongly supportive of President Donald Trump’s tariffs on Chinese goods, with 38% somewhat supportive; 18% strongly opposed to the tariffs and 12% somewhat opposed.

• Over 80% thought the trade dispute had an adverse effect on net farm income in 2018. Some 42% said net farm income dropped between 10% to 20%, with 29% saying it fell by over 20%.

• Some 81% want normal trade relations to resume.• Respondents largely view the trade dispute as a short-

term pain/long-term gain situation. Nearly 55% disagree or strongly disagree that nothing good will come out of the trade war with China.

• Some 14% thought their farm operation would be better financially one year from the time of the survey, but the number of farmers who think the U.S. economy will be stronger in three years was 44%.

• Just over three-quarters (76%) say American farmers will bear the brunt of the tariffs imposed by China.

• Nearly two-thirds (62%) say U.S. agriculture will lose markets due to the dispute.

• The survey did not detect changes in farmers’ planting, marketing and/or storage decisions due to the trade disrup-tion with China.

• A majority of respondents harbor five “pain points” related to China: 1) poor intellectual property protection, 2) the trade deficit, 3) the U.S. Treasury debt it holds, 4) cyber-economic espionage and 5) job losses to China.

• Although opinions were split about whether or not China is an ally to the U.S. economically, respondents think it is important to maintain a healthy economic relationship.

Poll: Farmer support for Trump risingThe latest Farm Journal Pulse Poll shows as of Oct. 30, 57% of respondents strongly approve of the way Trump is han-dling his presidency, a two-point gain from September and a 14-point rise since August. Another 21% say they some-what approve. On the other hand, 20% disapprove of the job Trump is doing — 15% strongly and 5% somewhat.

Corn, soybean harvests remain slowCorn harvest advanced 11 percentage points to 52% complete as of Nov. 3, 23 points behind the five-year average. Soybean harvest increased 13 points to 75% done, still 12 points behind the normal pace. There were still 39.3 million acres (6.6 billion bu.) of corn and 18.9 million acres (887 million bu.) of soybeans left in fields at the beginning of November.

South American crop pegs trimmedRains have improved recently, but the growing season in South America is off to an uneven start. As a result, South American Crop Consultant Dr. Michael Cordonnier lowered most of his crop estimates this week.Brazil: Cordonnier says it is prudent to be a little more

conservative with his Brazilian soybean crop estimate. He says while later planted soybeans don’t necessarily mean yields will be lower, they do increase those risks. Cordonnier trimmed his Brazilian soybean estimate by 500,000 metric tons (MT) to 123.5 million metric tons (MMT).

Soybean planting delays mean the safrinha corn crop will be planted later than normal. An extended rainy sea-son will be needed to ensure good yields. But after drop-ping his estimate 2 MMT two weeks ago, Cordonnier is sticking with his 103 MMT forecast for now. Argentina: Weather has improved, but has been uneven,

with western and southern areas remaining too dry. These areas account for roughly one-third of Argentina’s production. Cordonnier cut his Argentine soybean and corn crop esti-mates by 1 MMT each to 56 MMT and 49 MMT, respectively.Paraguay: Dry weather will cause an unusually high per-

centage of soybeans to be replanted and the ideal planting window has passed. As a result, Cordonnier trimmed his Paraguay soybean crop estimate by 500,000 MT to 9.5 MMT.Perspective: Cordonnier estimates total South American

soybean production at 194.8 MMT, up 8.2 MMT (4.4%) from last year. Production is still expected to rise 6.5 MMT (5.6%) in Brazil and 700,000 MT (1.3%) in Argentina.

He forecasts South American corn production to be virtu-ally unchanged from last year at 157.4 MMT. Brazil’s crop is expected to be 2 MMT bigger and Argentina’s 2 MMT smaller.

Brazil starts tariff-free wheat quotaBrazil has enacted its tariff-free import quota for 750,000 MT of wheat each year. The quota is open to any country that does not have a free trade agreement with Brazil, including the U.S., though foreign prices are cheaper than U.S. wheat.

November 9, 2019 / News page 3

Modest ag trade surplus in FY 2019The U.S. exported $10.3 billion worth of ag goods during September versus imports of $10.1 billion, resulting in a narrow trade surplus of $219.8 million. For fiscal year (FY) 2019 that ended Sept. 30, the U.S. exported $135.6 billion of ag goods and imported a record $130.9 billion for a surplus of just over $4.6 billion. That was down $11.3 billion from FY 2018 and the smallest surplus since FY 2006 when it was just under $4.6 billion.

China to restart Canadian meat buysChina announced it has resumed imports of Canadian pork and beef after four months of blocking shipments. Beijing says it has deemed Canada’s “rectification plan” to be in accordance with its safety requirements. China halted imports of Canadian beef and pork in June, citing fake export certificates, though the spat was political in nature and centered on Canada helping the U.S. arrest an execu-tive of China’s Huawei Technologies.

Smithfield plant going whole hogA Smithfield Foods slaughterhouse in Virginia has been cutting hog carcasses into thirds since spring and shipping the product to China to be further processed. China’s tariffs on frozen carcasses are 62% compared with 72% for muscle cuts, according to Erin Borror, an economist for the U.S. Meat Export Federation. Besides the cheaper tariffs, China has excess slaughter capacity due to sharp reductions in domestic pork production amid the African swine fever (ASF) outbreak. The U.S. did not export any hog carcasses to China between January and May of this year. Since then, exports of frozen hog carcasses to China have surged, coin-ciding with the remodeling of the Smithfield plant.

China pork imports to peak in 2022China’s pork imports will top out in 2022, before gradually easing as its domestic production recovers from ASF, according to a study by Gira Consultancy & Research con-ducted for the U.S. pork industry. Import volumes will stay high through 2025, but Chinese pork prices are expected to ease. By 2040, China’s pork imports are expected to fall back to 2017-18 levels before the country discovered ASF, according to the study.

“China will likely recover from African swine fever by 2027, but production will be 13% below where it was before the country’s first case was confirmed in 2018,” Gira details. The extended period of high pork prices will likely result in lasting changes to Chinese diets, with some consumers switching to cheaper proteins, including chicken. Gira believes the post-ASF market for pork in China will be around 80% of what it was in 2018.

Producer Crop Comments...Please send your crop comments to editors@profarmer.com.

Champaign Co., (east-central) Illinois:“I made a run to Mason City, Iowa, and back Nov. 3. There were way more beans left in fields than I expect-ed. I only saw six combines running the entire route. Rivers are full and soils are soaked.”

Dallas Co., (central) Iowa:“Lots of goose-necking in corn, but yields are running right at the APH of 223 bu. per acre. However, test weights are way light and moisture is 19%. A lot of neighbors still have beans in the field.”

Huntington Co., (northeast) Indiana: “Bean yields having 35-bu. swings in the same field! Corn moisture is still 28%. Yields vary greatly, also.”

Gage Co., (southeast) Nebraska:“Dryland corn is running 125 bu. to 135 bu. per acre, down from 150 bu. average last year. Rough irrigated ground is making 165 bu. to 175 bu. per are, which is close to average.”

Jefferson Co., (southeast) Nebraska:“Corn is running 20 bu. per acre below APH and 30 bu. to 40 bu. below last season. Sounds like the norm for the area. Beans were better than expected, but still 5 bu. per acre below APH and 10 bu. under last year.”

Charles Mix Co., (southeast) South Dakota:“Our corn looked good all year in our area, but yields are off a minimum of 10% from last year. Soybean yields aren’t even close to last year.”

North-central Missouri:“Probably 60% to 65% of soybeans are still in fields here and 40% to 50% of the corn. We normally should be winding down at this time of year. It’s real wet here.”

China fuels record Sept. pork exports The U.S. exported 465.0 million lbs. of pork in September — the most ever for the month and up 7.6% from last year. For the first nine months of 2019, pork exports at 4.496 bil-lion lbs. are up 3.7% from last year. A 104.4% year-over-year surge in exports to China is more than offsetting lower shipments to Japan, Mexico and South Korea. USDA fore-casts a 12.0% surge in pork exports this year.

U.S. beef exports dropped 2.7% from year-earlier levels to 253.2 million lbs. in September. Through the first nine months of 2019, the U.S. has exported 2.274 billion lbs. of beef, down 3.7% from last year. Of the top four destina-tions, only South Korea has imported more U.S. beef this year than it did through the first nine months of last year. But USDA forecasts beef exports to rise 1.1% from last year and increase another 5.7% next year, suggesting it antici-pates strong growth in beef shipments the final quarter of this year and next year as trade deals with Japan, South Korea, Mexico and Canada have a greater impact.

November 9, 2019 / News page 4

Corn — USDA cut its 2019-20 U.S. ending stocks forecast by 19 million bu. from October to 1.910 billion bushels. Total supplies were cut 119 million bu. on the smaller crop estimate. USDA cut total use by 100,000 bu. — 50 million bu. from exports, 25 million bu. from food, seed and industrial use (all from corn-for-ethanol) and 25 million bu. from feed and residual use. USDA now forecasts U.S. corn carryover will decline 204 million bu. from the previous marketing year, though production dropped 759 million bushels.

• USDA 2019-20 price: $3.85, up a nickel from last month.USDA cut 2019-20 global corn ending stocks without China by 6.1 million

metric tons (MMT) from last month to 100.7 MMT. Corn carryover outside of China is forecast to drop 8.1 MMT from the 2018-19 marketing year.

Soybeans — USDA increased its 2019-20 U.S. carryover projection by 15 mil-lion bu. from last month to 475 million bushels. It made no change to the supply-side of the U.S. balance sheet for soybeans, as the crop estimate was surprisingly left unchanged. USDA cut total use by 15 million bu., with all of it coming out of the crush forecast. USDA made no changes to projected exports, seed use or residual use. It now forecasts soybean ending stocks will decline 438 million bu. from a record 913 million bu. in 2018-19.

• USDA 2019-20 price: $9.00, unchanged from October. USDA increased its 2019-20 global soybean carryover projection without

China by 70,000 metric tons (MT) to 76.3 MMT. Global soybean ending stocks without China are expected to decline by 14 MMT year-over-year.

Wheat — USDA cut its 2019-20 U.S. wheat ending stocks forecast by 29 mil-lion bu. from last month to 1.014 billion bushels. USDA trimmed total supplies by 42 million bu., thanks to a smaller crop estimate. On the demand side, USDA cut expected food use by 5 million bu. and seed use by 7 million bush-els. USDA left feed and residual use and exports unchanged from last month. It now forecasts U.S. wheat carryover without China will tighten by 66 million bu. from the 2018-19 marketing year.

• USDA 2019-20 price: $4.60, down a dime from October. USDA raised its 2019-20 global wheat carryover forecast without China by

470,000 MT from last month to 142.6 MMT. It forecasts global stocks to be record-large and rise 4.5 MMT year-over-year.

Cotton — USDA slashed its 2019-20 U.S. cotton carryover estimate by 900,000 bales from last month to 6.1 million bales. It cut total supplies by 890,000 bales amid the smaller crop estimate. On the demand side, USDA increased unac-counted use by 10,000 bales. USDA left its export forecast for 2019-20 unchanged from last month. USDA still forecasts U.S. cotton carryover will increase 1.25 million bales year-over-year.

• USDA 2019-20 price: 61¢, up 3¢ from last month. USDA cut its 2019-20 global cotton ending stocks forecast without China by

2.4 million bales from last month to 48.1 million bales. It still forecasts global cotton stocks without China to rise by 3.2 million bales from 2018-19.

Corn CarryoverU.S. (Bil. Bu.)/Global* (MMT)

Soybean CarryoverU.S. (Mil. Bu.)/Global* (MMT)

Wheat CarryoverU.S. (Mil. Bu.)/Global* (MMT)

Cotton CarryoverU.S. (Mil. Bales)/Global* (Mil. Bales)

* Without China

* Without China

* Without China

* Without China

November data friendly for corn, negative for soybeans by Editor Brian Grete and Sr. Market Analyst Jeff Wilson

News alert and analysis exclusively for Members of Professional Farmers of America® 402 1/2 Main St. Cedar Falls, Iowa 50613-9985General Manager Joel Jaeger • Editor Brian Grete • Editor Emeritus Chip Flory • Sr. Market Analyst Jeff Wilson • Chief Economist Bill Nelson • Washington Policy Analyst Jim Wiesemeyer

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©2019 Professional Farmers of America, Inc. • E-mail address: editors@profarmer.comFarm Journal CEO, Andrew Weber • Division President Grey Montgomery

Feed Monitor

FEED

Corn Game Plan: You should have all corn-for-feed needs covered in the cash market through mid-November. Be pre-pared to exit long hedges in December futures that cover needs through mid-De-cember and extend cash coverage.

Meal Game Plan: On Nov. 6, we advised extending soymeal coverage in the cash market by another month through Decem-ber. Get current with feed advice.

Corn IV’19 85% I’20 0% II’20 0% III’20 0%

Meal IV’19 100% I’20 0% II’20 0% III’20 0%

Analysis page 1

$317.30

$304.10

DAILY MARCH MEAL

$324.50

DAILY DECEMBER LEAN HOGS

Position Monitor

HOGS - Fundamental AnalysisFutures continued their volatile trade amid each new headline tied to getting Phase 1 of a new China trade deal completed. The latest news that both sides will roll back tariffs helped to solidify the floor under prices last week after September export data was not as large as some had expected. Year-to-date shipments to all destinations are 4% above last year, but that lags USDA’s forecast for a 12% increase. Exports are good, just not great, amid rising U.S. pork production. Cash hogs remain weak and discounted to futures. Rising hog weights only add to the tonnage from record slaughter rates.

Game Plan: The futures rally should re-sume amid hopes for better Chinese pork demand. We want to stay patient on hedges and wait for an extended price recovery.

STEER DRESSED WEIGHTS ( LBS.)

LIVE HOG WEIGHTS (LBS.)

Position MonitorGame Plan: You should be out of all hedges. The next rally near the summer highs would be the next hedging oppor-tunity in the cattle market.

Feds Feeders IV’19 0% 0% I’20 0% 0% II’20 0% 0% III’20 0% 0%

Initial resistance is at $119.55. Stronger resistance is at the contract high of $124.175.

Initial support is at $114.925.Stronger support is at the May 6 low of $110.975.

Initial resistance is at the 40-day moving average (green line) of $67.75 and is

backed by the downtrend line near $68.20. Key resistance is at $73.10.

Initial support is at $63.25. Violation of that level could trigger a test of the September low at $57.775.

$110.975

$76.875

$73.10

$107.65

$119.55

DAILY DECEMBER LIVE CATTLE

$103.95

$114.925

$63.25

$57.775

$314.80

$301.70

CATTLE - Fundamental AnalysisCattle futures went from deeply oversold to overbought as prices surged more than 20% in the past two months on strong beef demand. Packer margins are back above $300 per head, helping the industry stay current despite the Tyson plant outage in Kansas since August. That has pushed the Choice beef premium to Select cutouts to more than $25 — a clear signal that feedlots remain current. Prices paused this week after September beef export data showed sales slipped from both August and a year earlier. Any improvement in exports will add to the 2019 bullish domestic demand story that has shown no sign of ending.

$124.175

November 9, 2019ANALYSIS

Lean Hogs IV’19 0% I’19 0% I’20 0% II’20 0%

The $314.80 level is initial resistance. Stronger

resistance is at $324.50.

Key support is at $301.70

November 9, 2019 / Analysis page 2

DAILY DECEMBER SRW WHEAT

WHEAT - Fundamental AnalysisSRW - Wheat futures are building a base of support thanks to increased global buys, though most of the sales have been for non-U.S. origins. Still, wheat sales are running 9% ahead of a year ago and shipments are up 26%; USDA is forecasting a 2% increase for the season. Wheat basis continues to firm in spots.

Position Monitor

Game Plan: Make sure you are current with recent new sales advice to take advantage of this fall rally. Be prepared to add to both 2019-crop and 2020-crop sales on rallies to-ward last summer’s high.

Initial resistance is the downtrend line near $5.28. Strong resistance is at $5.47.

$4.59 1/2

Initial support is at $5.04 3/4 and is backed by the 40-day moving average (green line) near

$5.02. Long-term support is $4.80 1/4.

$5.04 3/4

$4.80 1/4

$5.47

CORN EXPORT BOOKINGS (MMT)AVERAGE CORN BASIS (DECEMBER)

CORN - Fundamental AnalysisFutures fell to a five-week low before rebounding on Friday after USDA cut the crop size (see News page 1). January’s final update may show another reduction after recent cold, snowy weather hurt the more than 6 billion bu. still in fields at the start of November. However, much of the crop cut was absorbed by USDA lowering total use (see News page 4). Archer Daniels Midland Co. started offering free drying of corn at 19% moisture or less at three major mills in Illinois and Iowa. That’s another sign of commercial demand. Firm basis and narrowing of futures spreads also point to tightening supplies. Total corn export commitments are down 47% from a year ago and ethanol production remains sluggish.

Initial resistance is at $3.93. The $4.03 1/4

level is strong resistance.

$3.78 1/2Initial support is at $3.78 1/2. Contract-low support is at $3.66 1/2.

$3.93

$3.66 1/2

DAILY MARCH CORN

$4.13 3/4

$4.31 1/2

$4.03 1/4

DAILY DECEMBER CORNPosition Monitor

Game Plan: We’ll likely make additional sales recommendations on any strength into the end of the month. We want to reward the unusually strong cash basis. Be prepared to make some 2020 sales when we add to 2019-crop sales. The market is oversold and due for a correction. We still view rallies as selling op-portunities as slow exports and light corn-for-ethanol use limit upside potential.

Initial resistance is at $3.92 3/4. Strong resistance remains at $4.02 1/2.

Initial support is at $3.63 3/4. Contract-low support is at $3.52 1/4.

$3.63 3/4

$3.77 1/2

$4.02 1/2

$4.20

$3.92 3/4

$3.52 1/4

’19 crop ’20 crop

Cash-only: 40% 0% Hedgers (cash sales): 40% 0% Futures/Options 0% 0%

’19 crop ’20 crop

Cash-only: 60% 10% Hedgers (cash sales): 60% 10% Futures/Options 0% 0%

November 9, 2019 / Analysis page 3

DAILY DECEMBER HRS WHEATDAILY DECEMBER HRW WHEAT

DAILY MARCH SOYBEANS

$9.28 1/2

$9.07 1/2

$8.81 1/2

HRS ‑ USDA cut the spring wheat crop 38 million bu. and trimmed overall U.S. wheat inventories. The cuts were not unexpected and may provide limited support with a strong dollar curbing fresh export demand. China did buy some EU wheat, and if a trade deal is completed, it could help to boost Chinese purchases with dry weather becoming a threat.

HRW ‑ Lower production in the U.S., Argentina and Australia failed to offset higher USDA forecasts in the EU, Russia and Ukraine. World inventories climbed slightly and will limit rallies until there is a new threat to Northern Hemisphere crops in early 2020. Some late-planted U.S. winter wheat may not get established.

$9.62

Initial support is at $5.05.

$5.30 1/4

$5.60

$5.82 1/4

Initial resistance is at $5.30 1/4, with stronger resistance at $5.60.

Downtrending resistance is near $4.32.

$4.76 1/2

$4.17 1/2

$3.97 1/2$3.81Initial support is at $4.17 1/2.

$5.05

Consecutive closes above resistance at $9.62 would target a run to the winter high at $9.78 1/2 (not shown).

Initial support is the 40-day moving average (green line) near

$9.40. Stronger support is at $9.28 1/2 and $9.07 1/2.

SOYBEAN EXPORT BOOKINGS (MMT)AVERAGE SOYBEAN BASIS (JANUARY)

WHEAT EXPORT BOOKINGS (MMT)

AVERAGE WHEAT BASIS (DECEMBER)

SOYBEANS - Fundamental AnalysisSoybean futures got whipsawed after another week of mixed Chinese trade headlines (see News page 1). A U.S. soybean cargo finally unloaded in China after a weeklong delay due to a dispute between the importing state firm and the customs office over tariff payments of as much as $8.6 million. The shipment was one of the first booked after China announced tariff waivers but never made the details public. Big deliveries against expiring November futures were stopped by Cargill, confirmation of tightening supplies in the U.S. with harvest winding down and farmers holding tight. No major changes to the U.S. balance sheet shifts market focus to weather in South America.

Initial support is at $9.27. Stronger support is at $8.95 3/4.

DAILY JANUARY SOYBEANS

$8.95 3/4

$9.59

$9.27

$9.78 1/4

Position Monitor ’19 crop ’20 crop

Cash-only: 40% 0% Hedgers (cash sales): 50% 0% Futures/Options 0% 0%

Game Plan: Make sure you get current with our 2019-crop sales advice. We’ll likely make sales on a push above the summer highs. Also plan to make some 2020 sales on further strength. Ex-ports are improving along with crush margins, keeping funds in a buying mode. New Chinese purchases tied to a completed Phase 1 trade deal and fresh weather risks to the South Amer-ican crops would be needed to support rallies.

A push above the summer high of $9.59 would project a run toward the winter top at $9.78 1/4.

November 9, 2019 / Analysis page 4

’19 crop ’20 cropCash-only: 55% 0% Hedgers (cash sales): 55% 0% Futures/Options 0% 0%

75.61

TEXT MESSAGE ADVICE ALERTSIf you are not already receiving Pro Farmer

advice via text messages, give us a call to add

them to you membership at 1-800-772-0023.

NOPA Crush ReportOctober crush slipped from 2018.

FRI 11/1511:00 a.m. CT

5

Weekly Export SalesFocus is on soybeans and meat.

FRI 11/157:30 a.m. CT

4

Consumer Price IndexOctober inflation remained low.

WED 11/137:30 a.m. CT

3

USDA Crop ProgressHarvest getting closer to finish.

2

Veterans Day holidayGov’t closed, markets open.

MON 11/111

WATCH LIST

TUE 11/123:00 p.m. CT

month, the biggest monthly rally since March 2004. Block cheese prices gained 20.75¢ per lb. last month.

Last month’s Class III milk rally was the result of a six-month discount to Class IV prices that curbed milk flowing into cheese vats earlier this year. With less cushion of inventories, holiday demand overwhelmed the cheese market last month.

Seasonally, cheese prices will start to slide this month as plants make more prod-uct. Also, 4.8% fewer dairy cows went to slaughter the week of Oct. 19 than a year ago after weeks of expanded cow slaughter.

Dairy producers need to start looking for hedging and pricing opportunities with 2020 futures at the highest levels since 2014. It’s time to reward this rally!

Class III milk prices in October rose to an average of $18.72 per cwt., up nearly 21% from a year earlier and the highest monthly average since November 2014.

U.S. dairy producers have been reduc-ing their herds since early 2018, but domes-tic milk production has continued to edge higher in response to more milk per cow. Production fell year over year in only March, May and June this year. In September, milk production rose 1.3% to 17.616 billion lbs., despite the 53,000-head reduction in the cow herd from 2018.

However, the modest gains have been more than offset by a surge in domestic dairy product demand, especially for cheese. Barrel cheese prices on the CME rose 55.5¢ per lb. from the low print last

By Sr. Market Analyst Jeff WilsonFROM THE BULLPEN

Vegetable oils: Palm oil futures extended their rally to the highest price since Janu-ary 2018 as inventories of global vegetable oils are set to shrink to a 10-year low.

Because palm oil accounts for about 60% of global vegetable oil trade, it is the first oil to react to the tightening supply. World supplies trail demand for a second straight year on rising mandates for bio-diesel and increased food imports in India and China, the two largest consumers.

GENERAL OUTLOOKThe rally in palm oil and world vegeta-

ble oil prices began in July as it became clear the U.S. soybean crop was going to be smaller, Indonesia announced a higher biodiesel mandate and African swine fever curbed Chinese crush and raised imports.

Reports of a 20% drop in southern Malaysian palm oil output in early November extended the rally. World vegoil prices will likely remain strong until after the start of soybean harvest in South America.

DAILY DECEMBER COTTON

Game Plan: You should have entered a standing cash order to sell another 10% when December cotton futures hit 66.45¢. Get current with advice on rallies.

Position Monitor AVERAGE COTTON BASIS (DECEMBER)

COTTON - Fundamental AnalysisFutures drifted sideway ahead of USDA’s crop report (see News pages 1 & 4). Prices found support on a small improvement in weekly exports and China saying there is trade deal that includes rolling back tar-iffs. Still, world inventories will rise to a four-year high, limiting rallies.

COTTON EXPORT BOOKINGS (’000 BALES)

Initial resistance begins at 65.57¢. Stronger resistance

would be at 68.35¢.

Initial support is at 60.25¢. Contract-low support is at 56.59¢.

65.57¢

60.25¢

68.35¢

56.59¢

81.18

WEEKLY PALM OIL FUTURES

2,729

Futures soared after clearing downtrending resistance in August.

2,896