USDA Eyes Snow Hit Regions
Good Morning from Allendale, Inc. with the early morning commentary for October 17, 2019.

Grain markets are mixed as traders continue to watch headlines for new news on US-China trade negotiations and the ongoing US harvest. South American weather maps also remain a focus as the planting season pushes forward.

If you missed our Fall Corn and Soybean Outlook Update this week, you missed a look at what might be coming our way in these markets. What should we expect for harvest this year, and what could that mean for pricing? What will be the next catalyst to move markets? The recording of yesterday's presentation is available here, now.

The USDA announced it will collect new information on harvested acres of corn and soybeans in Minnesota and North Dakota after the early season snows. Any needed changes will be reported on the November 8th Supply and Demand report.

President Trump stated that he is unlikely to sign a trade deal with China until he meets with Chinese President Xi at the APEC Forum in Chile, which is scheduled for mid-November. Though headlines continue to lack clarity on the phase one deal, he explained that the deal is still being drafted.

The Renewable Fuels Association continued their criticism of the EPA's biofuels announcement stating, "If the Oct. 4 announcement from EPA was a big step forward, todays supplemental proposal is a step backward. It falls short of delivering on President Trumps pledge to restore integrity to the Renewable Fuel Standard...Simply put, this proposal is not what was promised by the administration just over a week ago." It's unlikely this is that last we've heard of this issue.

Weekly export sales, normally released on Thursday mornings, will be delayed until tomorrow due to Monday's Columbus Day holiday.

Q4 is the largest pork supply offering of the year. In addition, the trade has increased its supply estimate in recent weeks for this time period. We see Q4 pork production at 7.347 billion lbs, +4.5% year/year. USDA is at 7.420 billion, +5.5%. Based on the September Hogs and Pigs report the trade expects the big supply push to be an October/November issue before numbers tail back in December.

Cash Cattle bids were noted yesterday in Nebraska at $111 live and $172 dressed. Last week's average trades for Nebraska were $110 and $172. It appears as though packers are ready to buy at $1 higher this week.

On the technical charts, it appears as though the December Cattle could easily test the July 25 resistance of 114.92. The February has already pushed past that equivalent mark.

Dressed beef values were mixed with choice up 0.26 and select down .11. The CME feeder index is 145.12. Pork cut-out values were down .34.