Peason:  Here now to lend us his insight on these and other trends is one of our regular market analysts Brian Roach.  Brian, welcome back.
 
Roach:  Thanks Mike.  
 
Pearson:  In case you want to go over things again you can download or listen to our Market Analysis and Market Plus Podcasts any time online at IPTV.org\mtom.  Brian Roach, let's talk about the wheat market first.  That is the only grain market that really had a little run to the upside.  Was there anything in the WASDE Report that surprised us?
 
Roach:  Not so much surprise.  I think if you look at all three classes of wheat, Minneapolis - spring wheat is actually, we have triggered a Roach Ag sell signal this week.   So for cash flow purposes really only we have been recommending some small sales but that's about it.  Back to the WASDE Report, exports were revised slightly higher.  They left ending stocks that in a little tighter shape although world stocks actually increased a little bit, but I think the good news in the wheat market is that we have held last year's lows here in this Oct/Nov/Dec period so far it looks like we are going to.  We are really not much off the recent lows from a buying standpoint anyway but we are holding last year's lows.  I think that is positive and I think also as you turn the corner into next year let's just look at winter wheat for example.  I mean we have got 32.7 million acres in the ground last year.  I think that number probably repeats maybe even smaller going into the spring here.  That sets the stage for the market to really trade, yield and weather and trade it more sensitive on a tighter ending stocks situation than what we thought before.  
 
Pearson:  Given that we still have growing global ending stocks, is a slightly smaller acreage number in the U.S. going to really give us a reason to get excited?
 
Roach:  Well the good news is that we are still at a premium versus our competitors in the export market.  So even though we are a premium we are still seeing some business and the USDA saw a reason to raise the export number.  So, I would say at this point we have plenty of stocks and let's look at the wheat market kind of a four to five dollar market as far as soft wheat and hard red.  So, I think we have a chance to see strong prices into next year.  Spring wheat, I don't see the type of market that it was last year unless we have a repeat of the drought.  It is still dry up there in the Dakotas and so that is still kind of a question market.  I think we leave the market here.  If we can kind of hold these prices, I think that is positive and I think that we have a challenge with winter wheat getting the acres from the bean market that it did not get last year.  I think that sets up some upside for next year.
 
Pearson:  All right.  Then let's talk about the corn market because there kind of was a little bit of a surprise on the WASDE Report at least to me when USDA unveiled a new record national corn yield, 175.4 bushels per acres.  Did that surprise you?
 
Roach:  I think everybody is surprised.  There might be some growers that were seeing really big yields here in the last month particularly in Central Iowa here.  Where the drought has been, was really a story, and I think what is going on is you are just seeing technology.  You are seeing the farm production methods all coming together and you are seeing genetics perform and that's what we are seeing. 
 
Pearson:  That is what we are seeing.  Now we did see the market pull back on Thursday after the release of that report.  Ended up Thursday closed down what about 6.50/6.75?  Bounced back a little bit to close on Friday.  It looks to me we are still in that range Brain.  Is that what we are looking at?
 
Roach:  Well, we are not far - Well, we put in new lows here in the last day and we are still 11 or 12 cents above last year's lows with bigger stocks, but last year the low came in August and here we are in November.  So the market is a little bit off in terms of the calendar, but I think these are just good buying opportunities for corn.  It is not a selling opportunity.  Even the overages would not probably make much sense to sell here.  We are just going to have to buy some time in corn to see any real opportunities.  I did like to see the export numbers adjusted higher and that is positive, and I think that's really the biggest issue for corn right now is that we are still down over 300 million bushels from last year and if the dollar were to maintain its composure here and not run too far, then I think that corn probably gets competitive and remains competitive versus South America on into the wintertime.  Right now farmers are not going to be selling corn.  It is not for sale at these kind of prices.  So, I think that does help some things out.  
 
Pearson:  Is it not for sale at any point in the calendar or are you seeing growers take advantage of some of the strong carry that we have had over the past couple weeks into those spring and early summer contracts?
 
Roach:  I don't see that as an opportunity right now.  We can talk about carry in the market and try to capitalize on it but those prices out into July are still not that attractive especially at harvest here.  Those types of opportunities you should catch when we are selling in the summertime when prices are on up and then you really have a real benefit.  We have talking about that recently.  For now I think corn is not really for sale.  We will probably be into some Roach Ag buy signals next week unless prices were to move up off of these lows here.  
 
Pearson:  Gotcha.  Now we do have a question from one of our followers on Instagram and you can find us on Instagram @iptvmarket.  This one came from McKenna in Nebraska and I was looking at the charts of these two commodities earlier this week and I want to say yes, but McKenna wants to know from you Brian, do you see a resemblance within the corn and wheat markets?
 
Roach:  Well the two are feed products.  If you look at the wheat market, there are far more protracted than the corn market and there is not really as much of a demand story on wheat as there is corn at these kind of prices.  The feeder cattle guy is going to continue to feed a lot of corn at these kind of prices and stay away from the wheat for the most part.  I think from that aspect they are very similar.  A wheat rally in the spring would pull corn and vice versa and so for the time being, I think they probably will trade close and they will feed off of each other. 
 
Pearson:  Now let's talk about soybeans because we did get the USDA and their report did not change the projected yield.  The trade, I believe, anticipated to drop a little bit.  It didn't.  We saw beans sell off pretty hard after that news.  Was that just a blip?  Was that just a little whoa, hey the market kind of caught it and we are going to turn back around or did we really change something fundamental.  
 
Roach:  Well there has been a solid trend in place since August and beans have held that trend and if you look at a chart it is still holding that trend although yesterday's move - there might be a little chink in that trend if we don't trade up and out of it on Monday.  I think beans are still a good picture.  There is a good demand picture for beans.  China is raising their expectations for imports even though they are growing more beans.  I think the bean market - what we would like to do here is be ready to - we are going to wait for bean sales into January and February.  That will be most likely the next opportunity to generate cash flow where it makes some sense.  The rallies we saw last year were all based on problems in South America.  It is a big crop.  It is not as big as last year and so I think the picture is positive for beans and if beans are going to continue to move higher which whether we break down on this - on this trend that we have now or we trade higher on into December.  I think you want to be long beans in the front part of the year.  It has always been a good trade and I think that a farmer who is waiting for a selling opportunity will tie those together. 
 
Pearson:  Now let's move down into the world of livestock.  We saw almost a mirror image of last week's move in live cattle.  This week only it was the on the downside six dollars plus to the downside.  In December, Brian what is happening?
 
Roach:  Well if you look at - all the livestock have been very powerful into the front part of this month.  In the first week of November if you look at all three categories, we had strong markets, the economies around the world.  It is the first time in ten years that we have had all of the economies in growth mode which I think is positive and it has been positive in livestock and it has been positive in the crude market and we have had big moves.  I mean over a $20 move in the feeder cattle and so these are good opportunities for cattleman to book some profits.  So now the question is how big is the sell off and for how long and so today in live cattle we closed the gap that was in place 121.60 or so.  So, we closed that and then now we’re are down challenging this 20 day moving average maybe we hold here? I think cattle from a seasonal standpoint typically does sell off here and so that should be no surprise.  All of the livestock markets have big net long ownership by the funds.  So, they are going to peel some ownership, looking to book some profits and I think that what you are seeing in at least the hog and the cattle market is that we are seeing a response to that just ahead of the holidays.
 
Pearson:  Ok. Holiday taking some profits and going home.  
 
Roach:  Packers have backed off on the hogs; cash trade in live cattle has gone 125/124/122 this week.  At the same time the cutout values have actually held up.  I think this is pre-holiday trade kind of business, but feeder cattle look pretty strong.  They are in good shape.
 
Pearson:  They do and given the selloff we saw in the corn market on Thursday feeders did manage to retain some strength relative to live cattle.  How far can live cattle break before we start to pull feeders markedly lower?
 
Roach:  Well, cheap corn helps and so as long as we have cheap corn the feeder, the feed lots are going to continue.  That business stays strong.  I think that there could be some upside in the feeder cattle futures.  So when you think about the recent high around 162, we could see it 165 if things hold together.  So, I wouldn't rule that out.  
 
Pearson:  Ok.  Lean hog market down three bucks on the week.  As you mentioned packers just taking their ball and going home?  
 
Roach:  Just backing off.  
 
Pearson: Ok.  
 
Roach: As we think about birds through Thanksgiving, we think less of pork. The story in the pork market has been largely demand, both domestic and export market. China's news this week is really - I think if you think about the whole livestock part of that it really favors the pork market more so than beef because we can do that. That process is already in place in the supply chain to meet those specs.  So, I think we will look to the export market to see how we trade and whether we can hold this.  From a futures market standpoint we are down testing this 200 day moving average but we are down into a retracement box 62/63.  We are right there.  So, I think the market deserved what we got.  
 
Pearson:  We will keep an eye on it.  Brian Roach thank you so much for taking the time to join us.  
 
Roach:  Thanks Mike.
 
Pearson:  Brian Roach, thank you so much. That wraps up the broadcast portion of Market to Market. However, we will keep the conversation going including answering more of YOUR questions during "Market Plus" available in podcast and video form on our website. We are nearing the end of harvest and some of the great images we’ve found have been posted on our Instagram page of IPTVMarket. Join us again next week for a slice of Americana in the Land of Lincoln. So until then, thanks for watching. I’m Mike Pearson. Have a great week!