Corn closed the week ending July 26 at 18 cents lower. Private exporters did not report any export sales.
In the weekly export inspections report, weekly corn export inspections at 17.2 MB were the second lowest of the 2018-19 marketing year and were well below the average "needed" pace necessary to reach the USDA's annual export projection.
In the weekly crop progress and conditions report, U.S. corn conditions were down 1 percent from the week prior at 57 percent good-to-excellent vs. 58 percent expected, 58 percent the week prior and 72 percent last year. Notable states included Iowa improving 1 percent to 63 percent good-to-excellent; Nebraska up 1 percent to 77 percent: Missouri up 1 percent to 33 percent; Illinois up 1 percent to 43 percent; while Indiana lost 4 percent to 35 percent and Minnesota lost 1 percent to 57 percent good-to-excellent. 35 percent of the crop is silking vs. 66 percent normally.
The August supply/demand report promises to be a major market mover. With growing conditions improving, the report will need to be bullish to ignite additional buying interest. The report is expected to show more accurate farmers planted acres than the June acreage report.
Strategy & Outlook
Producers should use more option strategies this year than in previous years to provide greater marketing flexibility.
Soybeans closed the week ending July 26 at 20 cents lower. Private exporters reported a cancelation of 100,000 mts of soybeans previously sold to an unknown destination.
In the weekly export inspections report, soybean exports of 20.6 MB were also below the average "needed" pace and were the lowest in seven weeks as only 249,000 MTS were loaded for shipment to China this week. U.S. soybean conditions were unchanged from the week prior at 54 percent good-to-excellent vs. 54 percent expected, 54 percent the week prior and 70 percent last year. Notable states saw Iowa improve 1 percent to 64 percent good-to-excellent; Illinois up 4 percent to 45 percent; Nebraska up 2 percent to 73 percent while Missouri is unchanged at 41 percent and Minnesota is also unchanged at 60 percent. Indiana was 2 percent lower at 36 percent good-to-excellent. 40 percent of the crop is in the bloom stage while only 7 percent of the crop is setting pods. With over 70 percent of the crop planted in the month of June, lower than normal soybean yields are likely this year. Weather in August will determine longer term yields and price direction for the soybean market.
Strategy & Outlook
Large carryover stocks gives the market some cushion in case of lower yields but August is the most important month for soybean production.
For the week ending July 26, Chicago wheat closed 7 cents lower, Kansas City wheat closed 8 cents lower and Minneapolis wheat 4 cents lower. Egypt bought 300,000 MTS of wheat from Russia, Romania and the Ukraine.
Wheat exports were within market expectations at 15.6 MB, but were slightly below the average "needed" pace, as well. U.S. spring wheat conditions were unchanged 76 percent good-to-excellent vs. 76 percent expected, 76 percent the week prior and 79 percent last year. Minnesota is unchanged at 85 percent; North Dakota unchanged at 80 percent and South Dakota down 4 percent to 70 percent good-to-excellent. U.S. winter wheat harvest is now 69 percent complete vs. 73 percent expected, 57 percent the week prior, 79 percent last year and 79 percent average. Harvest in Missouri, Oklahoma and Texas is complete while 96 percent done in Kansas and 33 percent done in Nebraska. Oat harvest is 12 percent nationally vs. 22 percent normally. Oat conditions are 64 percent good-to-excellent vs. 68 percent the week prior and 72 percent last year. Yields are huge for the winter wheat crop and the crop tour suggests a large HRS wheat crop. The tour reported an average yield of 43.1 bushels per acre versus 41.1 last year.
Strategy & Outlook
The huge world supplies of wheat mandates producers to sell out inventory and use options to manage risks on sharp rally attempts.
Live & Feeder Cattle
For the week ending July 26, live cattle closed $1.67 higher while feeder cattle closed $3.87 higher. Light-to-moderate fed cattle trade occurred at steady to higher money. Prices in the north were mostly $113 to $114.50/cwt., live and $184 to $185 dressed — steady-to-higher with the week prior. The south traded cattle at primarily $111 to $112 — $1 higher than the prior week. The Fed Cattle Exchange online auction saw 378 head from three lots in Kansas and one lot from Texas. All lots asked $112 and all went unsold. Net beef sales of 9,600 MT reported for 2019 were down 51 percent from the previous week and 49 percent from the prior four-week average. The latest USDA steer carcass weights were up 4 pounds versus the prior week at 865, making them 2 pounds less than last year.
Strategy & Outlook
Producers should have transferred all risk to the cash markets. Summer lows have been established and a sizeable rally should unfold.
Lean hogs closed the week ending July 26 at 22 cents higher. Weekly hog weights dropped to 276.8 pounds from 280.0 pounds last week and 276.6 pounds last year. Net pork sales of 20,900 MT reported for 2019 were down 4 percent from the previous week and 3 percent from the prior four-week average.
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 email@example.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.