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3 Big Things, November 25, 2019

The corn bearish news may be lightening up, analyst says.

1. Ag Markets Trade Higher, As Bulls Take Over

In overnight trading, the Des. corn futures are 2¢ higher at $3.70½. March futures are 2¢ higher at $3.80½.

Jan. soybean futures are 3¢ higher at $9.00. March soybean futures are 3¢ higher at $9.14¼.

 Dec. wheat futures are 7¢ higher at $5.26.

In the outside markets, the U.S. dollar is seen steady, and the Dow Jones Industrials are seen higher.

Al Kluis, Kluis Advisors, says that the bullish news should provide support this week.

“The worst of the news about poor export demand for corn and slowing ethanol production is probably behind us. I will be watching the ethanol production report (the EIA Agency report) on Wednesday and the export sales report on Friday to see if we can get two strong weeks in a row,” Kluis told customers in a daily note.

Kluis added, “Will U.S. trade negotiators accept the invitation from China to meet there in December to continue the trade talks?”   

The stocks and equity traders will be eyeing an 8:30 a.m. ET: Chicago Fed National Activity Index Report, October (-0.20 expected, -0.45 in September).

Also, at 10:30 a.m. ET: Dallas Fed Manufacturing Activity, November (-3.5 expected, -5.1 in October).

Stocks are headed for a third month of gains globally, though some remain doubtful.

Federal Reserve Chairman Jerome Powell speaks on Monday at the Greater Providence Chamber of Commerce annual dinner in Providence, Rhode Island.


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2. The Funds Get Even Shorter The Corn Market

Meanwhile, Friday’s Commitments of Traders Report shows that managed money and producers remain very short the corn futures market, while bearishness in the soybean market fades.

In its report, the CFTC reported that managed money investors hold a net short position in the corn futures market totaling 123,530 contracts vs. 110,921 short contracts a week ago.

Managed money soybean positions remain net long at 18,452 vs. 31,050 a week ago.

For Chicago wheat futures, managed money investors flipped from net long 390 contracts a week ago to net short 2,049 contracts, as of Friday.

Producers

On Friday, the CFTC showed that producers held a net short position in the corn futures market totaling 198,173 contracts, up from 196,409 a week ago.

For soybeans, producers hold a net short position of 179,260 contracts, compared with 185,162 net short positions a week ago.

Also, producers are net short the wheat futures market by 57,263 contracts vs. a net short 57,920 contracts a week ago.
 
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3. The Number of Cattle in Feedlots Grows

The number of U.S. cattle being fed out to market weight jumped 1%, as of November 1 vs. a year ago.

On Friday, the USDA released its November Cattle-on-Feed Report.

The on-feed and placement numbers came in as expected by the trade.

Cattle and calves on feed for the slaughter market in the U.S. for feedlots with capacity of 1,000 or more head totaled 11.8 million head on November 1, 2019. The inventory was 1% above November 1, 2018, according to USDA data.

Placements in feedlots during October totaled 2.48 million head, 10% above 2018.

Net placements were 2.42 million head. During October, placements of cattle and calves weighing less than 600 pounds were 600,000 head; 600 to 699 pounds were 540,000 head; 700 to 799 pounds were 517,000 head; 800 to 899 pounds were 475,000 head; 900 to 999 pounds were 230,000 head, and 1,000 pounds and greater were 115,000 head.

Marketings of fed cattle during October totaled 1.88 million head, 1% below 2018.

Cattle on feed are steers and heifers being fed a ration of grain, silage, hay and/or protein supplement for slaughter market that are expected to produce a carcass that will grade select or better. It excludes cattle being backgrounded only for later sale as feeders or later placement in another feedlot.

Placements are steers and heifers put into a feedlot, fed a ration which will produce a carcass that will grade select or better, and are intended for the slaughter market.

Marketings are steers and heifers shipped out of feedlots to a slaughter market.

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