Mid Week Comments

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Bull Still Running - 10/27/20

The bull market is still running, with the market going higher in corn
and soybeans and making new highs this week - even while wheat had a bit
of a correction. There was rain and snow in HRW wheat country, with the
moisture helping wheat crops in KS, OK, and TX by alleviating some
drought conditions. Also, concerns about the late arrival of the rainy
season in Brazil supported corn and soybeans.

Weather forecasts today call for above normal precip in Brazil the next
week, and then return to more normal precip in the 8-14 day forecast.
That will greatly improve the planting outlook in Brazil, and expand
planting progress. Temps will be mostly normal to below normal in all of
SAM, including Argentina. However, Argentina will see below normal
precip for the entire 2 week period.

In the US, its still snowing in NM, TX, OK, and KS where they need the
precip for the HRW wheat crop. Actually, the recent snow/rain is very
beneficial for them, and with above normal precip forecast the next 5
days that also will be considered beneficial (which is why wheat prices
dived lower yesterday). But corn and soybeans held on in price, with new
highs in both markets during the day.

US harvest continues to grind forward, with 72% of the corn harvested
(16% ahead of normal) and 83% of the soybeans harvested (10% ahead).
Cotton is 42% harvested (equal to normal) while sorghum is 74% harvested
(13% ahead). Sugarbeets are 89% harvested nationally, 14% ahead of
normal while sunflowers are 50% harvested (13% ahead). Winter wheat is
85% planted (5% ahead), with 62% emerged (2% ahead). Conditions, though,
are not good at 41% rated G/E, down from 56% rated last year and the
second lowest in the past 10 years. Pasture and rangeland is rated only
20% G/E, same as last week and vs. 45% last year.

However, soil moisture levels in the US were up sharply last week,
reducing the chances of drought next year as moisture did come to the
northern corn belt last week (although mostly in the form of snow) while
the central belt got rain. Topsoil moisture levels rose 10% to 54% rated
adequate/surplus, a large rise in only 1 week. Subsoil moisture levels
rose 5% to 52% rated adequate/surplus, but still well below the 78%
rating last year. The improvement does argue for less chance of a
drought in 2021 - something that could become more bearish if that wet
week continues in the weeks and months ahead this winter.

In national news, Amy Coney Barret was confirmed and sworn in to the
SCOTUS last night, with radical left threats to "pack the court" still
echoed by leftist legislators. Noteworthy, the Supreme Court (without
Barret) voted 5-3 yesterday to not allow WI to continue to count mail-in
ballots received after election day (they tried to waive law for the
pandemic). More election related rulings are likely in the next month.

This has become an unusual election, not because the left promises 'free'
anything-you-want paid for by taxpayers, and the right promising
conservative, values oriented government. That happens almost every
election. But the press is leaning so far left as to censure the Biden
corruption controversy, and Biden himself hardly campaigning and instead
riding his early granted "COVID" lead to election day. The only focus on
his actual policy was recently on the "No Fracking/No Oil Industry"
position. But there's lots more where that comes from (like "Green New
Deal"). The swing toward Trump is growing momentum - what happens if
Trump wins the Presidency, and the Republicans get the Senate and House,
too??? I'm wondering who holding a paying job - besides Hollywood - will
want to vote to give free things (and pay for them) to undeserving
people, some of them illegal immigrants???

If Trump wins, that will pretty much put the nail in the coffin of power
by big press (CNN, NTY, Wash. Post, CNBC, Associated Press) and Big Tech
(Facebook, Twitter, Google). Because as biased as they are this year, if
their candidate still loses - maybe they no longer matter much.

Noteworthy, China has been buying a lot of Ag products from the US
lately, but it doesn't come close to the amounts they promised in the
Phase I trade deal. What happens after the election with China???

Ray can be reached at raygrabanski@progressiveag.com.
+++++++++++++++++++++++++++++++++++++++++++++++++++
Ray is President of Progressive Ag Marketing, Inc., a top Ranked
marketing firm in the country. See http://www.progressiveag.com for
rankings and link to data from Top Producer Magazine and Agweb.com.

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