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Soybeans exceeding expectations heading into the final 16 weeks of the marketing year
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Soybeans exceeding expectations heading into the final 16 weeks of the marketing year

CORN------

Corn closed the week 86 ¼ cents lower. Private exporters announced the cancelation of previous sales of 280,000 metric tons (mts) to China for 2020/21, and sales totaling 3,740,000 mts of corn to China for 2021/22 as well as sales of 100,000 mts of corn to Mexico for 2021/22. 

In the weekly export inspections report, U.S. corn exports were 67.2 million bushels (mb) and again solidly above the roughly 46.2 mb per week estimated they will need to run through the end of August in order to reach the USDA's 2.675 billion bushel (bb) export projection. 

Over the last 11 weeks, U.S. corn exports have averaged 75.3 mb. Cumulative export inspections of 1.778 bb compare to 991 mb at this time last year with 16 full weeks now remaining in the 2020/21 marketing year.

In the weekly crop progress and conditions report, US corn planting advanced to 67% complete versus 46% last week, 65% last year and 52% average. National corn emergence is 20% versus the average of 19%. 

In the weekly EIA report, U.S. ethanol production jumped to 979,000 barrels per day from 952,000 bpd the week prior, the highest production in 22 weeks, going back to early December, and putting production back above the roughly 966,000 bpd average weekly production that is needed through the end of August based on the USDA's current 4.975 bb annual corn for ethanol usage estimate. U.S. ethanol stocks last week declined sharply 815 million gallons from 858 mil gallons the week prior, with the 44 million gallon decline being the largest weekly draw-down in 11 weeks and putting outright stocks at the lowest level since December 2016. 

In the USDA report, the 2020/2021 corn ending stocks number was neutral at 1.257 bb as the USDA increased exports by 100 mb and food, seed, and industrial use down 5 mb to 6.395 bb. The new crop corn numbers were bearish with the ending stocks at 1.507 bb as the USDA cut 300 mb off of the export forecast.  The USDA used a 179.5 bushels per acre average for the U.S corn yield, the highest yield on record by 3 bushels per acre.  The USDA lowered their estimate for Brazil’s corn production by 7 million mts (mmt) to 102 mmt while Argentine corn production was left at 47 mmt. 2021/2022 world carryout for corn is projected to increase 8.8 mmt to 292.3 mmt on the increase in US and Brazil’s carryout.

Strategy and outlook: Highs are expected to be made in June ahead of the pollination and acreage report. Producers should consider accepting profits on long positions and begin to hedge 2021 production and establish a minimum price floor at that time.

SOYBEANS------

Soybeans closed the week 1 ¼ cents higher. Private exporters did not announce any private sales. 

In the weekly export inspections report, U.S. soybean exports last week of 8.7 mb and in line with average shipments over the last four weeks of 8.2 mb. Additionally, the recent shipment pace has been on track to reach the USDA's 2.280 bb annual export projection as weekly exports will need to average roughly 8 mb through the end of August. Cumulative export inspections of 2.047 bb compare to 1.261 billion at this time last year. 

In the weekly crop progress and conditions report, U.S. soybean planting moved to 42% complete versus 40% expected, 24% last week, 36% last year, and 22% average. National soybean emergence is 10% versus 4% on average. 

In the report, the USDA made no changes in their 2020/2021 soybean balance sheet with the carryout remaining at 120 mb, in line with expectations. The 2021/2022 soybean production was estimated at 4.405 mb using a yield of 50.8 bushels per acre with carryout at only 140 mb. China’s soybean imports for 2021/2022 were raised to 103.0 mmt. Brazil’s soybean production was unchanged at 136 mmt and Argentine soybean production was slightly lower at 47 mmt. 2021/2022 world soybean carryout is at 91.1 mmt, up 4.55 mmt from last year and slightly above expectations.

Strategy and outlook: Producers should maintain their re-ownership positions and look for highs to be made in the spring to summer timeframe. That is when final cash sales should be made and minimum price floors should be locked in for next fall's harvest.

WHEAT-------

For the week, Chicago wheat closed 55 ¼ cents lower, Kansas City wheat closed 79 ¾ cents lower and Minneapolis wheat 56 ¾ cents lower. Last week, did not report any export sales. 

In the weekly export inspections report, U.S. wheat exports were solid again at 20.0 mb and above the roughly 14.1 million per week average estimated that is needed over the final three full weeks of 2020/21 in order to reach the USDA's 985 mb export projection. Cumulative export inspections of 871 mb are up 1% from last year's 861 million, while USDA is currently estimating marketing year total exports to be up 2% on the year.

In the weekly crop progress and conditions report, Winter wheat conditions improved 1% to 49% good/excellent versus 48% expected, 48% last week and 53% last year. 38% of the winter wheat crop is headed, behind the average of 46%. Spring wheat planting advanced to 70% complete versus 69% expected, 49% last week, 40% last year and 51% average. 29% of the spring wheat crop has emerged, ahead of the normal pace of 20%. 

In the Stats Canada all wheat stocks report, Stats Canada said all wheat stocks as of March 31 were 16.231 mmt versus estimates of 16.7 mmts and 18.781 mmts last year.

The USDA report lowered old crop wheat exports by 20 mb to 965 mb and lowered food use by 5 mb to 960 mb which resulted in a 20 mb increase in old crop wheat carryout to 872 mb. This was 22 mb above expectations. The U.S. old-crop HRW carryout was estimated at 423 mb, HRS at 267 mb, SRW at 102 mb, White at 53 mb and Durum at 26 mb. For the 2021/2022 wheat crop, carryout was estimated at 774 mb with disappearance at 2.095 bb versus 2.088 bb for 2020/2021. 2021/2022 world wheat carryout at 294.9 mmt is almost unchaned from 294.7 mmt last year. 

Strategy and outlook: Dry conditions in the Dakotas, Montana, and Northern Minnesota are fueling the buying interest for Minneapolis spring wheat while the winter wheat Plains are seeing excellent rains and improving conditions.

LIVE CATTLE-----

Last week, live cattle closed $1.17 lower while feeder cattle closed $6.70 higher.

Last week, Light to moderate fed cattle cash trade occurred in the North at mostly $120 to $121 live, and $191 dressed – $2 to $3 higher than last week. Light to moderate volumes traded in the South from mainly $119 to $120 – steady to $1 firmer.

Last week, Fed Cattle Exchange Auction listed a total of 2,469 head, of which 1,588 actually sold at a weighted average of $119.93.

The latest USDA steer carcass weights were down 5 pounds from the prior week at 891, making them steady with last year.

Last week's beef export sales saw a net sales of 13,100 mts reported for 2021 with shipments of 17,700 mts.

Strategy and outlook: Producers should have window or fence strategies to protect the downside but allow for upside potential as tight supplies in the 3rd and 4th quarters should be bullish for values.

HOGS----

Lean hogs closed the week $4.35 lower. 

Iowa/S. Minnesota weekly hog weights saw a drop of 283.9 pounds versus 285.1 pounds last week and 295.1 pounds last year.

Last week's net pork sales of 14,700 mts reported for 2021 with shipments of 41,900 mts.

Strategy and outlook: Strong exports and tightening supplies will allow for higher prices into the spring and summer months. Producers can manage risk by using put options that leave upside potential available.

Brian Hoops is president and senior market analyst of Midwest Market Solutions Inc. The home office is in Springfield, Mo., with branch offices in Thief River Falls, Minn.; Verona, N.D.; Yankton, S.D.; Storm Lake, Iowa; and Springfield, Neb.

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