Corn closed the week 14 1/4 cents lower. Last week, private exporters did not report any export sales.
In the weekly export inspections report, U.S. corn exports last week were 25.4 million bushels and were at the upper end of market expectations of 15.7-27.6 million bushels and were up from the previous week's 17.3 mb. Corn exports over the last eight weeks totaled 194 million bushels vs. 468 million during the same period last year. This week's shipments did keep pace with the roughly 23.2 million bushels/week in which they will need to run over the final five weeks of 2018-19 in order to reach the USDA's 2.100 billion bushel export projection.
In the weekly crop progress and conditions report, U.S. corn conditions improved 1 percent to 58 percent g/e vs. 57 percent expected, 57 percent last week and 72 percent last year. This is the lowest rated crop since 2012. Iowa improved 2 percent to 65 percent g/e, Illinois up 1 percent to 44 percent g/e, Indiana up 1 percent to 36 percent, Missouri up 1 percent to 34 percent and South Dakota up 3 percent to 61 percent g/e; while Minnesota lost 1 percent to 56 percent, Nebraska lost 2 percent to 75 percent and North Dakota lost 2 percent to 75 percent g/e. 58 percent of the crop is silking vs. the normal pace of 83 percent. 13 percent is in the dough stage vs. normal pace of 23 percent.
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. Late summer seasonal lows are scored next week.
STRATEGY & OUTLOOK
Producers should use more option strategies this year than in previous years to provide greater marketing flexibility.
Soybeans closed the week 29 1/4 cents lower. Last week, private exporters reported a sale of 104,000 mts of soybeans to an unknown destination.
In the weekly export inspections report, U.S. soybean exports were a 22-week high at 37.9 million bushels, easily beating market expectations of 14.7-29.4 million bushels as China loaded 22.0 mb. It is estimated soybean exports will need to average roughly 28 million bushels/week over the final five full weeks of the 2018-19 marketing year in order to reach the USDA's 1.700 billion bushel export projection.
In the weekly crop conditions report, soybean conditions were unchanged for the week at 54 percent g/e vs. 54 percent expected, 54 percent last week and 70 percent last year. This is the lowest rated crop since 1992. Iowa lost 2 percent to 62 percent, Illinois lost 15 to 44 percent; while Minnesota was unchanged at 60 percent, North Dakota unchanged at 65 percent, South Dakota up 3 percent to 50 percent, Nebraska up 1 percent to 74 percent and Missouri unchanged at 41 percent. Nationally, 57 percent of the soybean crop is blooming vs. 79 percent normally and 21 percent is setting pods vs. 45 percent on average.
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. 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.
For the week, Chicago wheat closed 5 cents lower, Kansas City wheat closed 10 1/4 cents lower and Minneapolis wheat 2 1/4 cents lower. Last week, private exporters did not announce any sales.
In the weekly export inspections report, U.S. wheat exports last week of 14.4 million bushels slipped a bit from the previous week's 16.4 mb and were at the bottom end of market expectations. Through eight weeks of 2019-20, cumulative export inspections of 140 million bushels are up 25 percent from last year's slow-starting 112 million bushels, while wheat exports will need to average roughly 17.6 million bushels/week throughout August-May in order to reach the USDA's 950 million bushel export projection vs. last year's 18.1 million/week average from this point forward.
In the weekly crop conditions report, U.S. spring wheat conditions fell 3 percent to 73 percent g/e vs. 76 percent expected, 76 percent last week and 78 percent last year. Despite the lower ratings, this is still the second largest crop since 2010. Minnesota lost 2 percent to 83 percent g/e, North Dakota lost 2 percent to 78 percent and South Dakota lost 5 percent to 65 percent g/e.
U.S. winter wheat harvest advanced to 75 percent complete vs. 81 percent expected, 69 percent last week, 84 percent last year and 86 percent average. Nebraska is only 55 percent harvested and South Dakota is 24 percent done. After lowering Russian wheat crop last week, IKAR slightly raised Russian wheat crop this week to 76.4 mmts from 76.1 mmts. USDA is at 74.2 mmts in the July supply/demand report.
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
Last week, live cattle closed $2.27 lower while feeder cattle closed $5.55 lower.
Last week, fed cash trade in the North was mostly $113 to $114 live and $183 to $185 dressed, while the South traded at $111. Trade was steady to $1 lower compared to the week prior. The Fed Cattle Exchange online auction saw 475 head from four lots in Kansas. One lot sold 133 head at $111 while the other three lots went unsold.
The latest USDA steer carcass weights were up 1 pound versus the prior week at 866, making them 6 pounds less than last year. Net beef sales of 11,300 MT reported for 2019 were up 18 percent from the previous week, but down 35 percent from the prior four-week average.
STRATEGY & OUTLOOK
Producers should have transferred all risk to the cash markets. Summer lows have been established and a sizable rally should unfold.
Lean hogs closed the week $13.52 lower.
Weekly hog weights came in at 277.2 pounds vs. 276.8 pounds last week and 276.5 pounds last year. Weekly pork exports were 8,800 mts. Year-to-date, weekly pork exports are up 91,465 metric tons or 14.2 percent versus 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 email@example.com. Hoops can be contacted at 417-501-5132. (Copyright 2019 Midwest Market Solutions Inc.)
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