Wheat

For the week ending Aug. 23, Chicago wheat closed half a cent higher; Kansas City wheat closed 4 cents lower and Minneapolis wheat 4 cents lower. Exporters did not announce any private sales.

In the weekly export inspections report, U.S. wheat exports for the week were 18.0 million bushels. Average weekly exports through the first 11 weeks of 2019-20 of 18.2 million bushels are right in line with what wheat exports will need to average through next May to reach the USDA's 975 million bushel export projection. Wheat exports averaged 18.3 million bushels per week from this point forward last year. Cumulative export inspections of 200 million bushels are up 25 percent from last year's slow-starting 160 million, while the USDA is projection 2019-20 exports up roughly 4 percent from last year. In the weekly crop conditions report, U.S. spring wheat conditions improved 1 percent to 70 percent good-to-excellent vs. 69 percent expected, 69 percent the week prior and 74 percent last year. The only major producing state with improving conditions was South Dakota at 67 percent. Declining conditions in major producing states were Washington at 64 percent, and Idaho at 69 percent. U.S. spring wheat harvest advanced to 16 percent complete vs 21 percent expected, 8 percent the week prior, 56 percent last year and 49 percent average. The top producing states reported North Dakota at 12 percent harvested up, Montana at 20 percent, Minnesota at 14 percent, South Dakota at 27 percent and Washington at 25 percent. Winter wheat harvested as of Aug. 18 was at 93 percent vs. 89 percent the week prior.

Strategy & Outlook

The huge world supplies of wheat mandates producers to sell out inventory and use options to manage risks on sharp rally attempts.

Corn

Corn closed the week ending Aug. 23 at 14 cents lower.  Private exporters announced sale of 328,000 MTS of corn to Mexico for 2019-20 marketing year.

In the weekly export inspections report, U.S. corn exports last week of 20.1 million bushels were a 4-week low but were in line with the roughly 19 million bushels per week estimated that are needed in the final two weeks of the marketing year if the USDA's 2.100 billion bushel export projection is to be met. Cumulative export inspections of 1.817 billion bushels are down 16 percent from last year's 2.171 billion at this time. In the weekly crop conditions report, the report showed corn rated good-to-excellent as of Aug. 18 at 56 percent compared to 68 percent last year. The poor-to-very poor rating went up 1 percent to 14 percent. Major producing states with improving conditions were Illinois at 42 percent and North Dakota at 73 percent. Declining conditions in major producing states were Nebraska at 74 percent, Minnesota at 55 percent, Kansas 51 at percent, Indiana at 32 percent, South Dakota at 62 percent, Missouri at 36 percent and Ohio at 32 percent. 95 percent of the crop is silking, while 55 percent is in the dough stage and 15 percent is dented. Normally, 30 percent of the crop is dented by now.

Strategy & Outlook

Producers should use more option strategies this year than in previous years to provide greater marketing flexibility.

Soybean

Soybeans closed the week ending Aug. 23 at 24 cents lower. Private exporters did not announce any export sales.

In the weekly export inspections report, U.S. soybean exports, for the week ending Aug. 16, were a 25-week high at 42.6 million bushels. The week's activity included 20.24 MB exported to China and would lower their remaining old crop sales on the books to roughly 84 MB based on the week prior's export sales data. Given the rather strong exports over the last three weeks, it appears the USDA's 1.700 billion bushel export projection is likely to be reached, if not even slightly exceeded, if China continues to strongly ship in the final two weeks of the year. Over the last four weeks, total soybean exports of 154 million bushels compares to 107 million during the same period last year. In the weekly crop conditions report, the crop condition report showed soybeans rated good-to-excellent as of Aug. 18 at 53 percent vs. 54 percent the prior week and 65 percent last year. The poor-to-very poor rating was at 14 percent vs. 13 percent the week prior. Major producing states with improving conditions were Illinois at 40 percent, Minnesota at 60 percent, North Dakota at 63 percent and South Dakota at 56 percent. Declining conditions in major producing states were Iowa at 61 percent, Indiana at 33 percent, Missouri at 44 percent, Nebraska at 72 percent, Kansas at 48 percent, Arkansas at 55 percent and Wisconsin at 65 percent. 90 percent of the soybean crop is blooming and 68 percent is setting pods.

Strategy & Outlook

Large carryover stocks gives the market some cushion in case of lower yields.

Live & Feeder Cattle

Live cattle closed the week ending Aug. 23 at $1.72 higher, while feeder cattle closed 40 cents lower. Fed cattle trade in the north was mostly $108-$109 live and $175-$178 dressed, thus far – $2-$6 higher than the week prior. Trade in the south was primarily $106 – $1 higher versus the week prior. The Fed Cattle Exchange online auction saw 426 head offered for sale from four lots. All lots went unsold. Two lots from Nebraska asked $108.25, one lot from Texas asked $107 and one lot from Kansas asked $107.  The week prior’s USDA steer carcass weights were up 6 pounds versus the prior week at 878, making them 3 pounds less than last year. Net beef sales of 17,300 MT were up 7 percent from the previous week and 17 percent from the prior 4-week average. The monthly cattle on feed report was supportive with placements sharply lower than expectations. Placements were 97.9 percent vs. expectations of 100.1 percent, while on feed supplies were 100.2 percent vs. estimates of 100.8 percent and marketings at 106.9 percent vs. 106.4 percent expected.

Strategy & Outlook

Producers should have transferred all risk to the cash markets.

Lean Hogs

Lean hogs closed the week ending Aug. 23 at $2.07 lower. The Iowa/southern Minnesota weekly hog weights came in at 277.2 pounds vs. 276.8 pounds the previous week and 277.4 pounds last year. Net pork sales of 18,500 MT reported for 2019 were down 9 percent from the previous, but up 16 percent from the prior 4-week average. The monthly cold storage report showed total red meat supplies in freezers were up 3 percent from the previous month and up 1 percent from last year. Total pounds of beef in freezers were up 12 percent from the previous month, but down 6 percent from last year. Frozen pork supplies were down 3 percent from the previous month, but up 9 percent from last year. Stocks of pork bellies were down 7 percent from last month, but up 37 percent from last year.

Strategy & Outlook

Producers should have moved all risk to the cash markets.

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 bhoops@midwestmarketsolutions.com. Hoops can be contacted at 417-501-5132. (Copyright 2019 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.

A Kansas native, Katy is the daughter of a farmer and a cowgirl. She has been a professional journalist since 2008 and is the Editor of Midwest Messenger. She can be reached at katy.moore@lee.net.