Basis signals smaller corn, bean cropsCorn and soybean basis is firming during harvest, suggest-ing new-crop supplies aren’t as big as USDA’s October estimates (see charts on Analysis pages 2 & 3 and commen-tary in “From the Bullpen” on Analysis page 4). With basis firming, there’s incentive to wait before making additional 2019-crop cash sales. When basis tops, that will be the first indication it’s time to advance 2019-crop sales.

Perfect storm fuels LP shortagesWet crops coming in from fields, confinement operations turning on heaters and premature wintry weather are all contributing to localized propane shortages in the northern states. The ONEOK Pipeline, which services the region, has also suffered outages in recent weeks and is roughly two weeks behind schedule in delivering LP. A state of emer-gency has been declared in Iowa, Minnesota and Wisconsin. But farmers across the Midwest have reported shortages. Although prices have not yet sharply responded, we believe there could be a price reaction similar to the winter of 2013-14 if the shortages extend. We strongly advise propane users to get in touch with your supplier(s) to secure near-term needs.

USDA’s initial baselines for 2020-21• Corn: Planted acreage of 94.5 million, with harvested acres of 87.1 million. A national average corn yield of 178.5 bu. per acre would produce a crop of 15.545 billion bushels. Total use is projected at 14.745 billion bushels. Ending stocks are projected at 2.754 billion bushels. Price: $3.40 per bushel.• Soybeans: Planted acreage of 84.0 million, with harvested acres at 83.2 million. A national average bean yield of 50.5 bu. per acre would result in a crop of 4.200 billion bushels. Total domestic use is projected at 2.267 billion bu. and exports are seen at 1.895 billion bushels. That would project carry-over to 518 million bushels. Price: $8.85 per bushel.• Wheat: Planted acreage of 45.0 million, with harvested acres at 38.1 mil-lion. A national average yield of 48.2 bu. per acre would produce a crop of 1.836 billion bushels. Total domestic use is projected at 1.144 billion bu., with exports forecast at 925 million bu., resulting in carryover of 950 million bushels. Price: $4.80 per bushel.• Upland cotton: Planted acreage of 11.8 million, with harvested acres at 10.3 million and a national average yield of 845 lbs. per acre. That would produce a crop of 18.2 million bales. Total use is forecast at 18.450 million bales, which would leave ending stocks at 6.45 million bales. Price: 62¢ per pound.Perspective: These very early projections for next year are

mostly for budgetary purposes, but will likely be close to the figures USDA uses for its new-crop balance sheets next May.

Corn and beans drift sideways — Corn futures were near unchanged for the week Friday morning and it appears traders are content to maintain October’s sideways pattern into the new month. Soybean futures dropped to a three-week low before rebounding to near unchanged for the week Friday morning. Traders in both markets are awaiting direction from USDA’s Nov. 8 Crop Production and Supply & Demand Reports. Wheat futures extended their pullback from the October highs as the market yearns for bullish demand news. Cattle futures continued their push higher on fund buying after a breakout above the summer highs and support from rising cash cattle prices. Hog futures traded sideways to lower as traders grew impatient wait-ing on China’s next big purchase of U.S. pork and on seasonal weakness in the cash market.

Phase 1 of trade deal still on trackChile canceled the APEC summit Nov. 16-17 where President Donald Trump and China’s Xi Jinping planned to sign Phase 1 of the trade accord between the two countries. Trump says the two leaders are selecting a new site to sign the accord. China’s level of ag purchases is still hotly debated. Beijing wants purchases to be driven by demand and price, while the U.S. continues to push for a specific dollar amount. Treasury Secretary Steven Mnuchin said it will “take some time” for Chinese purchases of ag goods to scale up to an annual $40 billion to $50 billion that Trump said Beijing has pledged.

USMCA vote by Thanksgiving?Mexico’s top North American negotiator says he’s optimistic the White House and lawmakers can reach an agreement on the U.S.-Mexico-Canada Agreement (USMCA) before Thanksgiving after talking with House Speaker Nancy Pelosi (D-Calif.) and U.S. Trade Representative Bob Lighthizer. Pelosi says negotiations between Democrats and the White House are into the “last mile.”

Fed cuts rates, now likely to pauseAs expected, the Fed cut short-term interest rates 25 basis points to a range of 1.5% to 1.75% — its third rate reduction this year. Fed Chairman Jerome Powell noted “monetary policy is in a good place” to achieve desired economic targets.

Jobs data stronger than expectedNon-farm payrolls increased 128,000 in October, while the August and September figures were revised up a combined 95,000. Average hourly earnings rose 0.2%. The stronger-than-expected jobs data gives traders more confidence the Fed will pause on further interest rate cuts.

Q3 GDP better than expectedThe U.S. economy grew at an annualized 1.9% rate in the third quarter. While that was down from 2.0% GDP in the second quarter and 3.1% during the first three months of the year, economic growth slowed less than economists forecast.

News this week...2 — No real concerns with the U.S. winter wheat crop.3 — Feedlot numbers easing versus year-ago. 4 — Results from our annual land price, cash rents survey.

November 2, 2019 Vol. 47, No. 44

Go to ProFarmer.com

November 2, 2019 / News page 2

Follow us on Twitter:@BGrete@ChipFlory

@JWilson29@MeghanVick

@DavisMichaelsen@DoaneAg_Nelson

@RobHatchett1@DoaneAg_Vaught

USDA outlines initial hemp policy rulesUSDA’s interim final rule outlines hemp production guide-lines, starting in 2020. Under the rule, legal hemp produc-tion is defined as plants with 0.3% or less delta-9 tetrahy-drocannabinol (THC). Plants above that percentage in dry weight will be destroyed. Hemp producers will be eligible for a number of federal programs, including insurance cov-erage through Whole-Farm Revenue Protection. USDA will take comments on the interim rule for 60 days.

State and tribal governments may submit their hemp regu-latory plans to USDA for review. The rule establishes a federal plan for hemp producers in states or Indian territories that do not have their own approved hemp production plan. The interim final rule will sunset in two years. “We will use the 2020 growing season to test drive the interim rule to guide any adjustments made in the final rule,“ said Greg Ibach, USDA undersecretary for marketing and regulatory programs.

Conaway: Market-based biofuel policyHouse Ag Committee Ranking Member Mike Conaway (R-Texas) told us, “Let’s do what we need to do to protect the current [biofuel] investment and production. But any growth in that demand beyond where it is right now ought to be based on market principles and not some sort of an artificial demand by mandates.” He also said, “I’ve never, ever had a [crude oil] producer talk to me about ethanol. Really.” When we asked if he is talking to different folks than Senator Ted Cruz (R-Texas) is relative to the Renewable Fuel Standard, Conaway said, Cruz “is talking to the refiners.”

China pulls back on E10 mandateSo far, just three northeastern provinces of China that are home to the country’s ethanol production have incorporated E10 into the fuel supply. The slow pace of ethanol usage has caused Beijing to push back its mandate for nationwide fuel use to include 10% ethanol. Chinese imports of ethanol remain the most logical way for the country to get to nation-wide E10 use the quickest. Without that, it’s likely going to take China many years to fully implement an E10 policy.

China’s factories continue to struggleChina’s official Purchasing Managers Index (PMI) dropped to 49.3 last month, down 0.5 points from September — the sixth straight monthly decline. Even if the U.S. and China sign the first phase of a trade deal, economists doubt it will have an immediate positive impact on China’s manufacturing sector.

A lot of corn, beans left in fieldsAs of Oct. 27, USDA reported harvest at 41% complete for corn and 62% done for soybeans, 20 and 16 points behind their respective five-year averages. Using USDA’s individu-al state harvested acreage and yield estimates, that implies there were still roughly 7.2 billion bu. of corn and 1.1 bil-lion bu. of soybeans left in fields in the 12 Corn Belt states near the end of October. We anticipate there will be great-er-than-normal harvest loss on remaining unharvested acres due to the early snow and high winds.

HRW crop off to better start than SRWUSDA’s initial winter wheat ratings pegged 56% of the crop in “good” to “excellent” condition, which is right in line with the average start for the crop. But the HRW wheat crop is off to a better start than the SRW crop.

When USDA’s crop conditions are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 being perfect), the HRW crop starts with a rating of 353.7 points, up 13.7 points from last year and 0.6 point above the five-year average. The initial SRW CCI rating of 340.8 points is 26.6 points below last year and 31.7 points below the five-year average.

Farmer-friendly Macri ousted in ArgentinaArgentinians elected Alberto Fernandez as their new president, ousting Mauricio Macri from office. Fernandez’s vice president is former president Cristina Fernandez de Kirchner. While the new administration’s economic poli-cies aren’t yet laid out, export taxes on ag commodities are widely expected to be increased to raise government reve-nues. That could trigger a wave of farmer selling ahead of Dec. 10 when the new regime takes office. It also will favor a late shift to more soybean acres this year and a broader movement into soybeans and away from corn acres in the years ahead. Under Macri, corn acreage rose 65% and soy-bean plantings declined 15% the past four years.

Rains won’t help Argy wheat crop muchWidespread rains fell across previously dry areas of Argentina’s central grain belt last week. The rains will boost soil moisture for corn and soybean planting. But they likely came too late to have much of an impact for the wheat crop in the driest areas. The Buenos Aires Grain Exchange cut its 2019-20 Argentine wheat crop estimate by 1 million metric tons (MMT) to 18.8 MMT. In October, USDA estimated the Argentine wheat crop at 20.5 MMT.

November 2, 2019 / News page 3

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

Livingston Co., (east-central) Illinois:“Corn and soybean yields are each down about 20% from normal. Did first field of June corn on a class A farm. Farm has a 230 bu. APH. Corn only yielded 165 bu. per acre. Most June corn in our area is still 30% moisture.”

DeKalb Co., (northeast) Indiana:“Early bean yields were about average. Later beans look like lower yields. Tried a little corn and yield was not too bad, but it’s still around 26% moisture.”

Darke Co., (west-central) Ohio:“Corn yields from good dirt in the southern part of the county range from 150 bu. to 208 bu. per acre.”

Grundy Co., (central) Iowa:“Awesome corn. Our farm is averaging around 270 bu. per acre at 24% moisture.”

ACTUAL DOANE FORECASTS*YearAgo

LastWeek

ThisWeek Dec. Jan.-

March April-June

10/31/2018 10/23/2019 10/30/2019 (Monthly & quarterly avg.)CORN Central IL, bushel 3.29 3.77 3.82 3.90 4.00 4.05 Omaha, NE, bushel 3.33 3.76 3.77 3.95 4.05 4.10 Dried distillers grain, IA, $/ton 133.20 131.70 -- -- -- --SOYBEANS Central IL, bushel 7.75 8.99 8.94 9.10 9.25 9.40 Memphis, TN, bushel 8.12 9.32 8.49 9.45 9.60 9.75 Soymeal, 48% Decatur, IL, ton 309.40 306.60 303.70 310 315 320WHEAT Kansas City, HRW, bushel 4.90 4.18 4.16 4.30 4.50 4.75 Minneapolis, 14% DNS, bushel 6.94 6.85 6.88 6.75 6.90 7.05 St. Louis, MO, SRW, bushel 4.93 5.11 5.04 5.20 5.40 5.50 Portland, OR, soft white, bushel 6.13 6.03 6.02 6.10 6.25 6.35 Northeast MT, durum, 13%, bushel 4.50 6.45 6.40 6.15 6.35 6.50SORGHUM, Kansas City, cwt. -- 6.37 6.44 6.50 6.65 6.70COTTON, 11/16 SLM, 7 area, ¢/lb. 73.29 61.79 62.84 57.00 60.00 60.00RICE, nearby futures, cwt. 10.58 11.73 11.70 11.90 12.10 12.30BARLEY, Montana, malting, cwt. 8.30 8.90 8.90 8.90 8.95 9.00OATS, Minneapolis No. 2 heavy, bushel 3.11 3.21 3.16 3.20 3.25 3.30ALFALFA, NW Iowa, lg. sq. prem., ton -- -- 215.00 200.00 160.00 170.00SUNFLOWERS, Fargo, ND, cwt. 17.22 18.50 18.07 18.30 18.50 18.60HOGS, Nat’l basecost cwt. 51%-52% 58.23 53.87 49.60 65.00 71.50 80.00FEEDER PIGS, 40 lbs., nat’l avg., head 39.55 44.47 44.01 57.50 67.50 62.50CHOICE STEERS, NE feedlots, cwt. 115.08 110.47 111.00 113.50 122.50 120.50FEEDER CATTLE, Oklahoma City

Steers, 700-800 lbs./cwt. 155.01 148.11 146.89 147.50 145.50 152.50Steers, 500-550 lbs./cwt. 181.57 163.37 164.28 165.00 170.00 167.50Heifers, 450-500 lbs./cwt. 155.03 137.54 147.51 145.00 152.50 150.00

COWS, utility, Sioux Falls, SD, cwt. 61.25 56.02 53.54 55.00 60.00 63.50MILK, Class III, CME spot MO, cwt. 14.79 18.67 20.21 19.25 17.50 17.75LAMBS, Slg., San Angelo, TX, cwt. 113.14 122.50 122.00 -- -- --ENERGY

Ethanol, IA, gallon 1.24 1.46 -- -- -- --Farm diesel, U.S., gallon 2.75 2.39 2.42 2.40 2.43 2.48

*Average prices expected for the indicated time periods based on available information. Forecasts will be revised as necessary to reflect changing market conditions. Diesel prices are from Inputs Monitor.

Clay Co., (southeast) Nebraska:“Our corn is running 220 bu. to 230 bu. per acre versus 250 bu. last year. It’s still mostly standing decently.”

Johnson Co., (southeast) Nebraska:“Dryland corn is running 90 bu. to 100 bu. per acre because of nitrogen loss and having to mud it in. Soybean yields remain solidly above average.”

Sherman Co., (northwest) Kansas:“We had 1.5 inches of snow and plenty of wind dam-age. Likely 30 bu. to 40 bu. per acre of corn on the ground. Wheat stands look good, but it’s dry.”

Polk Co., (central) Iowa:“Soybean yields are about 15% off from last year’s 60- bu.-per-acre average. About 70% to 75% of the beans are out in this area. What soybeans remain in fields look pretty tough. Not started on corn yet because moisture levels are still in the low 20s. Maybe 10% of this area’s corn is combined.”

Feedlot numbers easing compared with year-agoAfter running above year-earlier levels for 20 consecutive months, U.S. feedlot numbers have been under year-ago the past two months. As of Oct. 1, USDA esti-mated there were 11.278 million head of

cattle in U.S. feed-lots, down 1.1% from last year.

The number of cattle placed into feedlots and the number of cattle marketed in September were both slightly higher than the average pre-report estimates.

USDA’s quarterly breakdown of feedlot supplies showed steer numbers down 222,000 head (3.1%) and heifers up 100,000 head (2.3%) from last year.

ASF reshaping China’s hog industryHog production margins in China aver-aged around 1,625 yuan ($231) per head at the end of the third quarter — the highest on record. The country’s outbreak of African swine fever (ASF) has been devas-tating for small hog producers. But record profits are causing large-scale operations to rapidly expand their herds and acceler-ating the country’s push toward more commercialized hog production.

USDA Average actual estimate (% of year-ago)

On Feed Oct. 1 98.9 98.9Placed in Sept. 102.0 101.6Mkted in Sept. 101.1 100.9

Cattle on Feed Report

November 2, 2019 / News page 4

Farm operators and landowners expect farmland val-ues and cash rents to hold about steady in 2020,

according to our annual survey of Pro Farmer Members and LandOwner subscribers. The survey found a modest amount of optimism. It also found a decline in pessimism about the year ahead compared to prior years.

More than 50% say land values will be unchangedThe survey conducted in early October found 55% of

respondents expect land values will remain unchanged in 2020. That’s up from 48% last year and 1.6 times higher than the response in 2014. Only 34% expect land values to decline in

2020, down from 48% in last year’s survey.

Slightly more looking to buy farmland, fewer willing to sellOur survey found 45% of respondents said they would be

in the market to buy farmland in 2020, up from 43% in 2018 and 9 points above 2017’s low of 36%. The percentage saying

“yes” to this question has consistently r e m a i n e d high, confirm-ing the growth focus of L a n d O w n e r subscr ibers and Pro Farmer Members in land buys.

Meanwhile, the percentage of those saying they will be in the market to sell next year has dropped by almost half — to 6% compared with 11% in 2018. This level of response matches the mark last seen in 2014. The percent-age fluctuated between 7% and 11% in 2015 to 2018.

Stable is the call for 2020 cash rentsSome 66% of respondents expect cash rents in their area

to remain unchanged for 2020. That’s up from 54% in 2018.The survey found only 8% expected cash rents to rise next

year, with 7% of total respondents looking for an increase of less than 10%. The percentage of respondents anticipating cash rents to remain stable next year is at its highest level in six years. The low was 21% marked in 2015, followed by

24% in the 2016 survey.

The per-centage look-ing for cash rents to decline is also at its lowest in the six years of our survey at 26%, with

21% anticipating a decrease of less than 10% and 5% look-ing for a decline of 10% or more. This compares to 42% anticipating a decline in 2018, 53% in 2017, 74% in 2016, 73% in 2015 and 67% in 2014.

The decrease in expectations reflects the reality that cash rents have declined in recent years. It also suggests the market may be near equilibrium.

Few will ‘walk away’ from leases if cash rents don’t dropA modest 4% of respondents say they “absolutely will

walk away from a lease if the rental rate is not lowered.” This compares to 7% in 2018, 9% in 2017, 14% in 2016 and 12% in 2015. The question was not included in our 2014 survey.

Some 24% say they “probably will” walk away from a lease if the rental rate is not lowered. Thirteen percent say they “absolutely will not” walk away from a lease and 59% say they “probably will not walk“ away from a lease that is not reduced. These are similar to last year’s figures of 9% for “absolutely will not” and 60% for “probably will not.”

The 9% saying they “absolutely will not walk” was con-sistent with responses for 2015 through 2018. The response percentage for those saying they “probably will walk” has ranged from a low of 47% in 2016, to a high of 60% notched in 2018 — 50% and 55% were the response rates in 2015 and 2016, respectively.

Expected Change in 2020 Farmland Values

Decline by 5% or more (5%)

Decline by less than 10% (29%)

Rise by 10% or more (3%)

Rise by less than 10% (9%)

Remain unchanged (55%)Note: Due to

rounding, the total percentage equals 101%.

In the Market to Buy Farmland

Expected Change in 2020 Cash Rent Rates

Decline by 10% to 19% (5%)

Decline by less than 10% (21%)

Rise by 10% or more (1%)

Rise by less than 10% (7%)

Remain unchanged (66%)

50%

45%

40%

35%

30% 2014 2015 2016 2017 2018 2019

Rising confidence in farmland, cash rent marketsby LandOwner Editor Davis Michaelsen and LandOwner Contributor Mike Walsten

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

Digital Managing Editor Meghan Vick • Inputs Monitor Editor Davis Michaelsen • Sr. Economist Dan Vaught • Sr. Economist Rob Hatchett • Sr. Economist Alan BarrettSubscription Services: 1-800-772-0023 • Editorial: 1-888-698-0487

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

Feed MonitorFEED

Corn Game Plan: We have advised ex-tending corn-for-feed purchases in the cash market through mid-November. Hold long hedges in December futures to cover all remaining needs through the first half of December.

Meal Game Plan: On Oct. 25, soymeal coverage was extended two weeks in the cash market through November. Our next buying target in December futures is $301.

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

Meal IV’19 67% I’20 0% II’20 0% III’20 0%

Analysis page 1

$317.30

$304.10

DAILY DECEMBER MEAL

$323.60

DAILY DECEMBER LEAN HOGS

Position Monitor

HOGS - Fundamental AnalysisFutures dropped amid the seasonal downtrend in cash hogs with slaughter on the rise. Wholesale pork cutout values slumped to a one-month low, the lowest for the end of the October in three years. With slaughter 5% greater than last year’s record, the market needs better demand from China to clear inventories. Export sales rebounded to 30,100 metric tons (MT) the week ending Oct. 25, with China buying just 1,900 MT. Sales for 2020 were a net 1,800 MT, including China reducing commitments by 4,200 MT. The market will continue to trade each new China trade headline until an actual Phase 1 deal is signed.

Game Plan: A futures rebound should resume when new Chi-nese pork demand is confirmed. We will stay patient on hedges and wait for an extended price recovery.

BEEF CUTOUT VALUE ($/CWT.)

PORK CUTOUT VALUES ($/CWT)

Position Monitor

CATTLE - Fundamental AnalysisCattle futures jumped to the highest levels in more than six months on the strength in the wholesale beef market. Choice cutout values are nearly $15 higher than a year ago and the highest for the end of October since 2014. Open interest and volume rose last week, indicating fresh fund buying to extend existing net-long positions. The strength in the beef market is across most cuts, and that underscores the solid U.S. employment and consumer spending story. Beef exports jumped 57% in the latest reporting week from a week earlier, led by new sales to Japan, South Korea and Hong Kong.

Game Plan: We lifted short De-cember fu-tures hedges for a small loss on Oct. 29. Keep feedlots current. Keep all risk in the cash market for now.

Feds Feeders IV’19 25% 0% I’20 0% 0% II’20 0% 0% III’20 0% 0%

Initial resistance is at the April 3 low at $119.55. Contract-high resistance is $124.175.

Old resistance at $114.925 is now initial support. Stronger support is at $110.975 and backed by the 40-day moving average (green line) near $110.30 and June low at $107.65.

Initial resistance is at the downtrend line near $68.80. Key short-term 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

$314.70

$301.40

$124.175

November 2, 2019ANALYSIS

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

Initial resistance is at $314.70. Strong resistance is at $323.60.

Initial support is at $301.40, with $291.60 remaining as key support.

$291.60

November 2, 2019 / Analysis page 2

DAILY DECEMBER SRW WHEAT

WHEAT - Fundamental AnalysisSRW - Wheat futures tested support and bounced. The market was due for a pause and the correction may be over with the start of a new month. A smaller crop and a new president that may boost export taxes will curb Argentine exports. Further strength in Russian prices may lead U.S. wheat higher.

Position Monitor

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

Initial resistance is at the broken uptrend near $5.17. Stronger resistance is at $5.41.

$4.59 1/2

Prices bounced from supportat the March high of $5.04 3/4.Long-term support is $4.80 1/4.

$5.04 3/4

$4.80 1/4

$5.41

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

CORN - Fundamental AnalysisFutures tested chart support and rebounded on U.S. cash basis strength. Snow and rain further delayed this year’s harvest of already reduced crops. Argentine export offers disappeared last week after the election of a new president amid uncertainty about when export taxes may be raised. That firmed Brazilian export prices, helping to improve the competitive position of U.S. corn. It needs a boost, with export sales 48% behind a year ago and shipments 61% behind. Ethanol demand is slowly improving but remains behind last year. Price rallies will depend on the size of expected USDA crop cuts Nov. 8 and progress on China trade talks that could open up demand for U.S. corn and products.

Initial resistance is at $4.03 1/4. Stronger resistance remains

at $4.13 3/4.

$3.87 1/2

Initial support is at $3.87 1/2. Stronger support at $3.78 1/2.

$4.03 1/4

$3.78 1/2

DAILY MARCH CORN

$4.13 3/4

$4.31 1/2

DAILY DECEMBER CORNPosition Monitor

Game Plan: Make sure you are current with sales advice, with cash corn trading at the highest fall price in six years. We’ll likely make additional sales recommendations on the next push to the upside. Be prepared to make some 2020 sales when we add to 2019-crop sales. We still view rallies as selling opportunities as slow exports and reduced corn-for-ethanol use limit upside potential.

Initial resistance remains at theMarch high of $4.02 1/2. Stronger

resistance persists at $4.22 1/2.

Initial support is at $3.88. Stronger support is at the old gap area of $3.77 1/2.

$3.63 3/4

$3.77 1/2

$4.02 1/2

$4.22 1/2

$3.88

’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 2, 2019 / Analysis page 3

DAILY DECEMBER HRS WHEATDAILY DECEMBER HRW WHEAT

DAILY MARCH SOYBEANS

$9.28 1/2

$9.77

$9.07 1/2

$8.81 1/2

HRS ‑ Prices spent the week under pressure from chart-based selling, but the market found support from improved demand. Weekly spring wheat export sales led the way at 176,837 metric tons, pushing total commitments to the highest level since 2016. This week’s USDA production update should show smaller U.S. and Canadian spring wheat crops.

HRW ‑ Futures ended October with a second straight monthly gain amid an increase in global buying of non-U.S. supplies. The buying pushed global prices higher, pulling U.S. values up. European and Black Sea crops have received some beneficial rain recently, easing concerns about smaller crops in Argentina and Australia.

$9.62

Initial support is at $5.05.

$5.30 1/4

$5.60$5.82 1/4

Initial resistance is the old broken support at $5.30 1/4. Stronger resistance is at $5.60.

Downtrending resistance is near $4.35.

$4.76 1/2

$4.17 1/2

$3.97 1/2$3.81

Initial support is at $4.17 1/2.

$5.05

Consecutive closes above resistance at $9.62 would target a run to $9.77.

Initial support is at $9.28 1/2.Stronger support is at $9.07 1/2.

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

WHEAT EXPORT BOOKINGS (MMT)

AVERAGE WHEAT BASIS (DECEMBER)

SOYBEANS - Fundamental AnalysisSoybeans completed their corrective retreat and are now waiting for USDA’s Nov. 8 Crop Production Report for confirmation of a further decline in this year’s U.S. crop. Strong cash basis signals commercials are expecting the weather-delayed harvests to cut yields. Funds are also increasing bullish bets on tighter global inventories. The start of the South American growing season has not been ideal, increasing the importance of wetter November forecasts verifying to curb dryness risks. Demand for U.S. beans has been brisk, mostly from stepped-up Chinese shipments. Traders are waiting for clarification of the timing and size of Chinese purchases if the Phase 1 trade deal is signed this month.

Initial support at $9.27 is backed by the 40-day moving average (green line) near

$9.23. 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 ad-ditional sales on further price strength tied to either a smaller U.S. crop or progress on put-ting the verbal China trade pact in writing. Also plan to make some 2020 sales on price strength. New Chinese purchases and harvest results that confirm a smaller U.S. crop will likely be needed to fuel rallies in the weeks ahead.

Initial resistance is at $9.59. Stronger resistance is at the Feb. 1 high of $9.78 1/4.

November 2, 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’re not already receiving Pro Farmer advice via text messages, give us a call to add them to your membership. 1-800-772-0023.

USDA World Supply & DemandTightening global inventories.

FRI 11/811:00 a.m. CT

5

USDA Crop Production ReportSmaller corn, soy crops expected.

FRI 11/811:00 a.m. CT

4

Weekly Export SalesFocus is on soybeans and meat.

THUR 11/77:30 a.m. CT

3

September ag trade updateExpect better Chinese shipments.

2

USDA Crop Progress ReportRain, cold keeps harvesting slow.

MON 11/43:00 p.m. CT

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WATCH LIST

TUE 11/510:00 a.m. CT

January soybean futures traded to the deferred futures the past few weeks.

Both corn and soybean futures rose for a second straight month in October. September and October rallies occurred 10 times in corn since 1980 and 11 times in soybeans. In corn, prices continued high-er in November six years and rallied on average of 7.4%. That means December corn could rise near $4.20 this month. For soybeans, January beans rallied nine times in those prior 11 years and added an average of 3%, or a target of $9.60.

Cash market strength and seasonals both point to rising corn and soybean futures in November. Stay patient on cash sales at least until USDA updates its crop forecasts on Nov. 8.

Cash markets are signaling U.S. corn and soybean production will be smaller than currently forecast by USDA.

The national average corn basis firmed 6 1/4¢ last week to 7¢ above December futures, the strongest for the date since before 1994. The prior three-year average is 19 3/4¢ below futures. The national soy-bean basis firmed 7 1/2¢ last week to 15 3/4¢ below November futures, the best for the end of October since 2015.

A narrow and improving cash basis is one of the strongest signals that the market wants your grain. This usually doesn’t happen until well after the harvest is over, and that is definitely not the case this year.

Another bullish signal is the narrow-ing of the discount December corn and

By Sr. Market Analyst Jeff WilsonFROM THE BULLPEN

U.S. Stocks: Leading investment manag-ers are increasingly bearish, despite the S&P 500 Stock Index rising to new highs last week, according to the latest Big Mon-ey Poll by Barron’s.

Among respondents, 31% are bearish on stocks, the highest level since the mid-1990s, while only 27% are bullish, less than half the 56% proportion one year ago.

Individual investors also polled by Barron’s are similarly gloomy, with only

GENERAL OUTLOOK29% calling themselves bullish and 42% believing that U.S. stocks are overvalued.

Bearish money managers are focused on the market’s lofty valuation, a muddled economic outlook and the increasingly frac-tious political landscape, which could stifle stocks’ advance in coming months. They warn stock prices are advancing faster than corporate profits and the third rate cut in five months by the Federal Reserve is losing its potency to boost growth and investment.

DAILY DECEMBER COTTON

Game Plan: You should have a standing cash order to sell another 10% when De-cember futures reach 66.45¢. Get current with cash sales on rallies.

Position Monitor AVERAGE COTTON BASIS (DECEMBER)

COTTON - Fundamental AnalysisFutures rose to resistance while notching a second straight monthly gain. The market rose as cold, wet weather raised U.S. crop concerns, but farmer sales capped gains. Weekly exports did not show any new Chinese buying amid signs of new strains to complete Phase 1 of a U.S./China trade deal.

COTTON EXPORT BOOKINGS (’000 BALES)

Initial resistance at 65.57¢ continues to hold on a closing

basis. 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 S&P 500 STOCK INDEX

2,729The S&P 500

Index is back to the top of the

channel that hashalted past rallies.