CORN — ANALYSIS — Corn closed the week 3 3/4 cents lower. Last week, private exporters reported sales of 130,000 mts of corn to an unknown destination and 120,000 mts of corn to Mexico.
Weekly export sales of corn showed a total of 24.2 mb (614,200 mt) with 23.6 mb (600,700 mt) for the 2016-2017 marketing year. This was above the 7.5 mb (190,300 mt) needed this week to be on pace with USDA's June demand projection of 2.225 bb. In the weekly crop progress and condition report, NASS reported U.S. corn crop conditions at 67 percent good/excellent, in line with expectations and down 1 percent from last week. Last year's the crop was rated 75 percent g/e. Informa updated 2017 acreage with corn at 90.186, up 190,000 from March. U.S. ethanol production has fallen below last year's same-week rate in each of the last two weeks as production for the week ended 6/09/17 1.002 million barrels/day (295 million gallons/week) was 1.1 percent below last year's 1.013 mbpd and followed last week's production being down 0.7 percent. There is still time for a weather market to develop, but good rains in the eastern cornbelt leaves the western belt as the lone dry area remaining. Corn is pollinating in Missouri and rains will help the crop reach full yield potential.
STRATEGY & OUTLOOK
Look to make sales and lock in prices during rallies over the next four weeks.
SOYBEANS — ANALYSIS — Soybeans closed the week 1/4 cent lower. Last week, private exporters did not report any private sales.
Weekly export sales of soybeans showed a total of 24 mb (654,200 mt) with 12.5 mb (340,200 mt) for the 2016-2017 marketing year. This raised total sales to 2.166 bb, 6 percent above USDA's June demand projection of 2.050 bb. The first U.S. soybean crop conditions of the year are 66 percent good/excellent, lower than 69 percent expected and well below last year's 74 percent rating. This is the lowest conditions in four years for mid-June. U.S. soybean planting is 92 percent, now ahead of last year's 91 percent rate. Informa updated 2017 acreage with soybean acreage at 89.362 million, up 120,000 from the March estimate. The NOPA crush report placed May crush at 149.2 million bushels, about 6 mb higher than average trade estimates for the month that called for 143 mb. This was one of the largest crush figures for the month of May and rebounded from a crush of 139.134 mb in April. May NOPA soyoil stocks were reported at 1,749 bln pounds, up 24 mln pounds.
STRATEGY & 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 from not only the U.S. but also from South America.
WHEAT — ANALYSIS — For the week, Chicago wheat closed 19 3/4 cents higher; Kansas City wheat closed 22 cents higher and Minneapolis wheat 33 1/2 cents higher. Last week, private exporters did not announce any sales.
Weekly export sales for all wheat showed a total of 13.7 mb (373,400 mt), all for the 2017-2018 marketing year. This was slightly below the 14.6 mb (396,300 mt) needed in this week's report to be on pace with USDA's June demand projection of 1.000 bb. In the weekly crop progress report, U.S. winter wheat crop conditions are 50 percent good/excellent vs 49 percent expected, up 1 percent from last week. The winter wheat crop remains well below last year's rating of 61 percent. U.S. winter wheat harvest has advanced to 17 percent complete, slightly below expectations of 22 percent but up from 10 percent last week. Last year, only 10 percent of the crop was harvested at this time and normally, only 15 percent is harvested. In a big surprise, U.S. spring wheat crop conditions were revealed at only 45 percent good/excellent, well below expectations of 53 percent and down 10 percent from last week. Seventy-nine percent of the spring wheat crop was rated g/e last year. This is the lowest rated crop since 1992 when 43 percent of the crop was rated g/e. Only 13 percent of the South Dakota crop is rated g/e. North Dakota, the largest spring wheat producing state has 43 percent rated g/e and Montana is only rated 23 percent g/e. Informa updated 2017 acreage: with spring wheat at 11.198 million; down 110,000 from March.
STRATEGY & OUTLOOK
Look to make sales and lock in prices during rallies over the next six weeks.
LIVE CATTLE — ANALYSIS — Last week, live cattle closed $5.92 lower while feeder cattle closed $6.30 lower. Last week, Fed cattle trade in the South was established from $127 to $132 this week, $4 to $8 lower compared to last week. The majority of trade however did occur between $130 and $132 this week. Trade in the North was established from $128 to $133 this week, $5 to $8 lower compared to last week. Dressed trade in the North occurred from $206 to $215, $5 to $12 lower compared to the week prior. Last week's Fed Cattle Exchange was not held due to technical issues. USDA steer carcass weights moved 9 pounds higher to 847 pounds and are now 17 pounds below a year ago weights of 859 pounds. If weights to continue to increase, third quarter production is expected to swell. USDA FAS weekly beef exports were 14,502 metric tons, up 9.3 percent from a year ago. Weekly beef exports are now up 16 percent year to date vs. 2016. April beef exports were 218.3 million pounds, down from March exports of 234 million pounds, year to date exports are up 189.1 million vs. a year ago.
STRATEGY & OUTLOOK
Producers with cattle to market this summer and fall should be transferring risk with put options. Feed costs for the year should be locked in for the entire year.
LEAN HOGS — ANALYSIS — Lean hogs closed the week $3 lower. Weekly pork exports were 21,007 metric tons, down 1 percent from a year ago and now up 14 percent year to date. Weekly hog weights were 279.4 pounds, down 1.8 pounds from the prior week and are 2.5 pound below last year. April pork exports were 462.9 million pounds, down from the March export pace of 523.8 million pounds.
STRATEGY & OUTLOOK
Producers should have hedged 2017 production as prices tested weekly chart resistance. 2017 feed costs should be locked in for the entire year.
Midwest Market Solutions is the leading edge in commodity marketing and trading. It was established in March 2002 and is a full-service commodity brokerage and marketing advisory service, clearing through R.J. O’Brien. The firm specializes in individual trading strategies for the investor, personalized marketing programs for individual farm operations as well as full-service and discount broker services. The home office is located in Springfield, Mo., with branch offices in Yankton, S.D.; Storm Lake, Iowa; Alvord, Iowa; Thief River Falls, Minn., Verona, N.D., and Springfield, Neb. Midwest Market Solutions is committed to providing clients with the best information and service as possible. Midwest Market Solutions provides clients with written newsletters, trade research and hedging as well as trading advice.
Brian Hoops is president and senior market analyst of Midwest Market Solutions. Brian can frequently be heard on radio stations across the country including KWMT, KAYL, KKIA, Ag News 890, Red River Farm Network and Commodity Wrap on Sirius XM radio. Brian can also be heard daily on DTN, is seen as a frequent guest on RFD-TV and is heard on the Minneapolis Grain Exchange marketing hotline. Brian also writes several newsletters that are published throughout the Plains and the Midwest, covering the states of Iowa, Minnesota, North and South Dakota, Nebraska, Kansas, Montana, Wisconsin, Wyoming and Idaho. Brian has been quoted in the Wall Street Journal, Bloomberg, Reuters and Dow Jones newswires and U.S. Farm Report.
Daily market commentary and trade recommendations are available at www.midwestmarket-solutions.com or by e-mail at firstname.lastname@example.org. Hoops can be contacted at 417-501-5132. (Copyright 2016 Midwest Market Solutions Inc.)
This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.