For the week ending Aug. 9, Chicago wheat closed 9 cents higher; Kansas City wheat closed 4 cents lower and Minneapolis wheat closed 2 cents lower. Egypt bought 415,000 mts of Russian/Romanian and Ukrainian wheat.
In the weekly export inspections report, U.S. wheat exports of 14.5 million bushels were little-changed from the previous week's 15.2 million bushels and were modestly better than last year's same-week exports of 12.0 million bushels, bringing 2019-20 cumulative exports to 155 million bushels vs. 124 million at this time last year. Wheat exports will need to average roughly 18 million bushels per week through the end of next May in order for the USDA's 950 million bushel export projection to be met. In the weekly crop conditions report, spring wheat rated good-to-excellent as of Aug. 4 came in unchanged at 73 percent. Of the top six states, three reported better, three worse, and zero unchanged good-to-excellent ratings. One major producing state with improving conditions was Montana at 69 percent. Declining conditions in major producing states were Idaho at 63 percent and North Dakota at 75 percent. Spring Wheat harvested as of Aug. 4 was at 2 percent. Winter Wheat harvested as of Aug. 4 was up 7 percent at 82 percent.
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 closed the week ending Aug. 9 at 7 cents higher. Private exporters did not report any export sales.
In the weekly export inspections report, U.S. corn exports last week of 24.9 million bushels were at the lower end of market expectations of 23.6-29.5 million bushels, slightly lower than the previous week's 26.3 million bushels and substantially below last year's same-week exports of 50.7 million bushels. In the weekly crop progress and conditions report, U.S. corn conditions showed corn rated good-to-excellent as of Aug. 4 at 57 percent vs. 58 percent the week prior and compared to 71 percent last year. The poor-to-very poor rating went up 1 percent to 13 percent with Illinois poor-to-very poor up 4 percent to 22 percent. Of the top 18 states, eight reported better, seven worse, and three unchanged good-to-excellent ratings. Major producing states with improving conditions were Iowa at 66 percent, Minnesota at 57 percent, South Dakota at 66 percent, Wisconsin at 65 percent and Michigan at 46 percent. Declining conditions in major producing states were Illinois at 41 percent 4, Nebraska at 71 percent, Kansas at 54 percent, and North Dakota at 73 percent. What stands out is Illinois is rated 41 percent good-to-excellent vs. 81 percent last year. The August supply and 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. Late summer seasonal lows are scored later in the month.
Strategy & Outlook
Producers should use more option strategies this year than in previous years to provide greater marketing flexibility.
Soybeans closed the week ending Aug. 9 at 23 cents higher. Private exporters reported a sale of 165,000 mts of soybeans to an unknown destination for 2019-20 and 135,000 mts of soybean meal to the Philippines.
In the weekly export inspections report, U.S. soybean exports, for the week ending Aug. 2, were 37.8 million bushels, near the upper end of market expectations of 22.0-40.4 million bushels, mostly unchanged from the previous week's 39.1 million bushels and modestly above last year's same-week exports of 32.8 million bushels. In the weekly crop conditions report, soybean condition rated good-to-excellent as of Aug. 4 were 54 percent unchanged from the week prior and compared to 67 percent last year. The top producing state of Illinois saw good-to-excellent condition decline by 4 percent to 40 percent and the poor-to-very poor condition increase by 4 percent to 24 percent. Of the top 18 states, 10 reported better, seven worse, and one unchanged good-to-excellent ratings. Major producing states with improving conditions were Iowa at 65 percent, Minnesota at 61 percent, Missouri at 47 percent, South Dakota at 54 percent and Michigan at 44 percent. Declining conditions in major producing states were Illinois at 40 percent, North Dakota at 63 percent, Nebraska at 70 percent, Kansas at 49 percent, Ohio at 29 percent and Arkansas at 53 percent. Weather in August will determine longer-term yields and price direction for the soybean market. Late summer seasonal lows are due by the middle of the month.
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.
Live & Feeder Cattle
For the week ending Aug. 9, live cattle closed 92 cents lower, while feeder cattle closed 27 cents lower. Fed cattle trade in the north was mostly $180 to $185 dressed and $113 to $115 live, steady to $3 lower than the week prior. Trade in the south was near steady with the prior week at $111. Boxed beef traded to $2 to $3 higher on the week as demand improved for Labor Day purchasing. The Fed Cattle Exchange online auction saw 376 head offered for sale in three lots. Two lots totaling 227 head sold as one lot from Kansas of 115 head sold at $111 and one lot from Nebraska of 112 head sold at $113.25. One lot from Texas asked $111 and went unsold. Net beef sales of 22,000 MT were up 94 percent from the previous week and 41 percent from the prior 4-week average. The latest USDA steer carcass weights were up 3 pounds vs. the prior week at 869, making them 5 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 Aug. 9 at 95 cents higher. Hog futures saw strong gains on Thursday, Aug. 8, fueled by a positive weekly export sales report. Last trading day for August lean hog futures and options is on Wednesday, Aug. 14. Weekly hog weights came in at 276.4 pounds vs. 277.2 pounds the week prior and 278.4 pounds last year. Net pork sales of 13,700 MT reported for 2019 were up 55 percent from the previous week, but down 13 percent from the prior 4-week average. The U.S. exported more than 200,000 tonnes of pork in June, up 11 percent from the same period last year. Exports to China were biggest in three years at more than 40,000 tonnes.
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.