Corn closed the week 3 ½ cents higher. Private exporters did not announce any export sales.
In the weekly export inspections report, U.S. corn exports last week of 52.1 million bushels (mb) were in line with the export pace over the previous five weeks which averaged 49.9 mb per week. Corn exports will need to run even stronger to eventually reach at least 2.8 billion bushels (bb) if China fully ships its purchases of U.S. corn by the end of the marketing year. Cumulative export inspections of 897 mb compare to 479 million at this time last year.
In the weekly Energy Information Administration report, U.S. ethanol production posted the first decline in seven weeks, falling to 911k barrels per day (bpd) from 937k bpd the week prior and compared to the 937k bpd average since the last week of 2020. U.S. ethanol stocks rose last week to 1.020 billion gallons from 999 million gallons the week prior and were just short of stocks two weeks prior of 1.021 billion gallons which were the highest since early May 2020. Even with the increase, ethanol stocks remain modestly below last year's 1.041 billion gallons.
Strategy and outlook: As we enter into the key growing period of South American production, producers should maintain their re-ownership of sold inventory with futures and options. As values approach the spring planting timeframe, producers should consider accepting profits on long positions and begin to hedge 2021 production. Look for highs to be made in the spring to summer timeframe.
Soybeans closed the week 7 ¼ cents higher. Private exporters did not announce any export sales.
In the weekly export inspections report, U.S. soybean exports were 29.7 mb, easily the lowest of the 2020/21 marketing year so far. The previous weekly low exports were 47.6 mb. Over the previous four weeks, soybean exports averaged 75.2 mb per week. Cumulative export inspections of 1.840 bb compare to 1.038 billion last year, leaving weekly exports needing to average roughly 11.3 mb per week through the end of August to reach the USDA's 2.250 bb export projection versus last year's 19.8 million per week average from this point forward.
The January National Oilseed Processors Association crush report showed a crush of 184.654 mb, the second biggest on record. This up from 183.159 mb in December and 176.940 mb in January, 2020. Soyoil supplies rose to an eight-month high of 1.799 bp from 1.699 bp in December and below the 2.013 bp in January 2020.
Strategy and outlook: Producers should have sold soybeans off the combine and should have re-owned production using futures and options in deferred contracts. Maintain the reownership positions and look for highs to be made in the spring timeframe. That is when final cash sales should be made and prices should be locked in for next fall's harvest.
For the week, Chicago wheat closed 16 ¾ cents higher, Kansas City wheat closed 16 ¾ cents lower and Minneapolis wheat 14 cents higher. Exporters did not announce any export sales.
In the weekly export inspections report, U.S. wheat exports of 14.4 mb were below the roughly 19.4 mb per week "needed" pace to reach the USDA's 985 mb export projection and were the lowest in four weeks. Cumulative exports of 640 mb are down a minor 2% from last year's 651 million, while the USDA annual estimate reflects an expected 2% increase from last year.
Strategy and outlook: Wheat is following corn and soybeans higher. With poor growing conditions in the US, wheat has to maintain a positive price relationship with corn and soybeans or winter wheat will be abandoned this spring and spring wheat acres will be much smaller than expected.
Last week, live cattle closed $1.45 lower while feeder cattle closed $1.42 lower.
The monthly Cattle on Feed report is slightly bearish compared to trade expectations as on feed supplies and placements were larger than expected with marketings slightly below estimates. On feed supplies came in at 101.5% versus estimates of 100.8%. This was also higher than a month ago when 100.1% on feed figures were reported. Placements came in at 103.2% versus 99.8% estimated and well above last month's 100.9% figure. Marketings were only 94.4%, slightly less than the average guess of 95.1% and well below last month's 101.0% figure.
Light to moderate volumes of fed cattle traded in the North at mostly $113 to $114 and $180 to $181 dressed – steady to $1 higher than last week. In the South, light trade occurred at $114 – steady with last week.
Last week, the Fed Cattle Exchange had 1,444 head listed for sale and none sold on the normal Wednesday sale. They had a second sale on Thursday with the same 1,444 head on the showlist. The FCE saw 41 head sold at $113.75 with 838 head sold at $114, steady with last week.
The latest USDA steer carcass weights were down 1 pound from the prior week at 919, making them 22 pounds above last year.
Last week's beef export sales saw a net sales of 22,900 metric tons (mts) with shipments of 15,500 mts reported.
Strategy and outlook: Supplies of cattle are increasing until April. The market has looked ahead and anticipated stronger cash trade into the later spring and summer months. Producers should have window or fence strategies to protect the downside but allow for upside potential.
Lean hogs closed the week 30 cents lower.
Iowa/S. Minnesota weekly hog weights saw a decline to 287.2 pounds from 288.3 pounds the week prior but heavier than last year’s 285.3 pounds.
Last week's net pork sales of 33,300 mts with shipments at 39,800 mts.
Strategy and outlook: Strong exports of US pork and higher product values have rallied futures and the cash markets. As the market rallies into resistance, producers should at a minimum, use a put/call spread to lock in profits.
Michael Baron provides estate planning guidance at Great Plains Diversified Services in Bismarck, North Dakota. Email him at KeeptheFamilyFarm@gmail.com.