Skip to main contentSkip to main content
You have permission to edit this article.
Edit
Market Forecaster: Large supplies of soybeans hitting market soon

Market Forecaster: Large supplies of soybeans hitting market soon

  • Updated
Soybean shipping facility

The $7 million roof at the TEMCO facility spurred unusually rigorous examination of the Pacific Northwest’s climate.

Corn closed the week 14 3⁄4 cents lower. Private exporters did not report any private sales.

Weekly export sales showed a total of 17.3 million bushels with 6.3 million for the 2016-2017 marketing year. This was above the 3.9 million bushels needed to be on pace with USDA’s July demand projection of 2.22 billion bushels.

In the weekly crop conditions report, the National Agricultural Statistics Service reported US corn crop conditions at 65 percent good or excellent versus 68 percent last week and 76 percent last year. Iowa rated 77 percent good or excellent, Illinois was 63 percent with Minnesota 80 and Nebraska 68.

The July supply and demand report was expected to show a reduction in yield with average trade estimates pegging this crop year’s corn yield near 169 bushels per acre. However, the USDA did not change its yield estimate, leaving the corn crop yield at 170.7 bushels per acre. The 2017 estimates for corn production came in at 14,255 billion bushels, up from 14,065 billion in June, reflecting the changes made to planted and harvested area in the last quarterly grain stocks report.

Ending stocks for 2016-2017 were increased by 75 million bushels to 2,370 million as there was a 75 million reduction in feed use. The 2017-2018 ending stocks were predicted to come in at 2.32 billion bushels, up 215 million bushels from the June report. The stocks to use ratio for 2017-2018 increased from 14.8 percent in June to 16.2 in July. World stocks for the current crop year came in at 227.5 million metric tons, up 2.9 million metric tons from June.

Strategy and outlook: Look to make sales and lock in prices during rallies over the next four weeks.

SOYBEANS

Soybeans closed the week 10 cents lower. Private exporters reported sale of 1.3 million metric tons to China.

Weekly export sales showed a total of 25.1 million bushels with 8.4 million for the 2016-2017 marketing year. This raised total sales to 2.2 billion, or 5 percent above USDA's July demand projection of 2.1 billion. Crop conditions were 62 percent good or excellent versus 64 percent last week, 71 percent last year.

Iowa rated 67 percent good or excellent, Illinois 66 percent, Minnesota 73, with North Dakota 47 and Nebraska 66. The July supply and demand report was bearish, as soybean production came in at 4.26 billion bushels, up just 5 million from the June report. USDA left yield forecasts unchanged at 48 bushels per acre. The 2016-2017 soybean ending stocks were lowered by 40 million bushels to 410 million bushels, which was nearly 25 million bushels below average trade guesses. The 2017-2018 stocks came in at 460 million versus 490 million that was estimated. World stocks for 2016-2017 saw a 1.6 million ton increase to 94.8 million tons. This was well above trade estimates of 93.2, which matched the USDA’s June estimate.

Strategy and outlook: Producers need to make new crop sales on rallies during the next four weeks as large supplies of product will be hitting the market.

 WHEAT

Chicago wheat closed 19 1⁄2 cents lower, Kansas City wheat closed 29 1⁄2 cents lower and Minneapolis wheat 8 3⁄4 cents lower. Egypt purchased 115,000 metric tons of Russian wheat.

Weekly export sales for all wheat showed a total of 13.1 million bushels, all for the 2017-2018 marketing year. This was below the 13.9 million needed to be on pace with USDA's July demand projection of 975 million.

Spring wheat crop conditions fell to 35 percent good or excellent versus 37 last week and 70 last year. North Dakota is rated 36 percent good or excellent, South Dakota only 10 percent good or excellent, and Montana just 11 percent.

Winter wheat harvest advanced to 67 percent complete versus 53 percent last week, 65 percent on average.

The July supply and demand report was bearish as the U.S. spring wheat’s first production estimate of the year came in at 423 million bushels, 7 million above average trade estimates and 111 million below the previous year’s crop. This was also a 13-year low for the July World Agricultural Supply and Demand Estimates report. All wheat production came in at 1.76 billion bushels, 64 million lower than June report and 12 million above average trade guesses. Ending stocks increased by 23 million bushels in part to a lowered domestic use number and increased imports. World ending stocks for all wheat were increased to 258.1 million metric tons from 256.4 million metric ton a month earlier.

Strategy and outlook: Look to make sales and lock in prices during rallies over the next four weeks.

LIVE CATTLE

Live cattle closed $2.80 higher while feeder cattle closed $9.30 higher.

Fed cattle trade in the South was established mainly at $120, $2 to $3 higher compared to the previous week. Cattle in the North traded at $118 to $121, $2 to $4 higher compared to the week before. Dressed trade in the North occurred at $188 to $191, steady to $3 higher. Boxed beef was sharply lower, however boxes may find support in the near term. Feeder cattle were $3 to $5 higher.

The weekly Fed Cattle Exchange online auction saw volume return in a major way, with more cattle selling than in the past four weeks combined. 1,907 head traded, out of the 2,665 on the list (71.56 percent sold). The weighted average price from the total auction sales was $117.83 vs $117.35 from the last week’s auction.

USDA steer carcass weights were up four pounds from the prior week at 859 pounds and are nine pounds below a year ago weights of 868 pounds. If weights to continue to increase, third quarter production is expected to increase to a seven-year high, and fourth quarter supplies should be record large. Net beef sales of 12,500 metric tons reported for 2017 were down 27 percent from the previous week and 7 percent from the prior four-week average. It certainly appears the fundamental and technical trends have changed.

Strategy and outlook: Producers with cattle to market this fall and winter should be transferring risk with options on rallies.

HOGS

Lean hogs closed the week $2.85 lower. Net pork sales of 9,700 metric tons reported for 2017 - a marketing-year low - were down 27 percent from the previous week and 49 percent from the prior four-week average.

Weekly hog weights were 278 pounds, up 1.6 pounds from the prior week of 276.4 pounds and are 0.3 pound’s below last year’s level of 278.3 pounds.

Strategy and outlook: Producers should have hedged 2017 production as prices tested weekly chart resistance. Your 2017 feed costs should be locked in for the entire year.

Brian Hoops is president and senior market analyst of Midwest Market Solutions Inc., based in Springfield, Mo., with branch offices in Thief River Falls, Minn.; Verona, N.D.; Yankton, S.D.; Storm Lake, Iowa; and Springfield, Neb. Hoops can be reached at 417-501-5132.

AgUpdate Daily Headlines

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Find the equipment you're looking for

Get up-to-the-minute news sent straight to your device.

Topics

Breaking News