CORN

Corn closed the week 9 3/4 cents lower. Last week, private exporters announced sales of 122,000 metric tons of corn for delivery to Mexico. Of the total, 52,000 metric tons is for delivery during the 2018-19 marketing year and 70,000 metric tons for delivery during the 2019-20 marketing year.

U.S. corn exports, for the week ended June 13, were 25.7 million bushels and were down from the previous week's 33.5 mb. They were the lowest in 23 weeks going back to the first week of January 2019. This week's exports were modestly below the roughly 30.3 million bushels/week needed to average through the end of August in order to reach the USDA's 2.200 billion bushel export projection. 

In the weekly crop progress and conditions report, U.S. corn planting advanced to 92 percent complete vs. 92 percent expected, 83 percent last week, 100 percent last year and 100 percent average. Roughly 7.8 million acres of corn remains to be planted based on the USDA's March 29 Prospective Plantings report estimate; however, these acres are likely to be moved into preventive plantings. Corn emergence is now 79 percent vs. 62 percent last week and 97 percent on average. U.S. corn conditions were unchanged from the prior week at 59 percent g/e vs. 59 percent expected, 59 percent last week and 78 percent last year. 

STRATEGY & OUTLOOK

With funds now going net long due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies. July corn is closing in on major weekly resistance. 

SOYBEANS

Soybeans closed the week 6 1/4 cents higher. Last week, private exporters reported sales of 189,000 metric tons of soybeans for delivery to unknown destinations. Of the total, 126,000 metric tons is for delivery during the 2018-19 marketing year and 63,000 metric tons for delivery during the 2019-20 marketing year. 

U.S. soybean exports were down modestly from the previous week's 27.0mb as well as last year's same-week exports of 30.1 mil bu. Soybean shipments were again below the roughly 29.5 million bushels/week needed to reach the USDA's current 1.700 billion bushel export projection — the 10th consecutive week in which soybean exports have fallen below the average "needed" pace.

U.S. soybean planting is now 77 percent complete vs. 79 percent expected, 60 percent last week, 96 percent last year and 93 percent average. Roughly 19.7 million acres of soybeans remain to be planted based on the USDA's March 29 Prospective Plantings report estimate vs. 6.3 million which would have been left to plant based on an average planting pace. Soybean emergence is now 55 percent vs. 34 percent last week and 84 percent last year.  

In the monthly NOPA crush report, NOPA reported its members crushed 154.8 million bushels of soybeans in May, sharply below average market expectations of 162.5 million and down notably from April NOPA crush of 160.0 million bushels. May crush was the second lowest of the 2018-19 marketing year so far, only beating the short month of February's 154.5 million bushels, while the average daily crush rate of 4.99 million bushels/day was easily the lowest of the year so far and actually the lowest since September 2017.

Additionally, May NOPA crush was down 5.4 percent from last year's 163.6 million, reflecting the fourth consecutive month in which crush was not above year ago levels.

NOPA reported its members produced 1.822 billion pounds of soybean oil in May vs. 1.871 billion in April and 1.885 billion pounds last year May. 

STRATEGY & OUTLOOK

With funds covering shorts due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies. 

WHEAT

For the week, Chicago wheat closed 12 3/4 cents lower, Kansas City wheat closed 23 1/2 cents lower and Minneapolis wheat 26 1/2 cents lower. Last week, Egypt bought 120,000 mts of wheat from Russia and Romania. 

U.S. wheat exports, in the second week of the 2019-20 marketing year were 13.8 million bushels, down from the previous week's 17.5 mb. Cumulative exports of 29 million bushels are in line with those of last year at this time, while wheat shipments will need to average roughly 16.7 million bushels/week in order to reach the USDA's 900 million bushel export projection vs. last year's 17.6 million bushels/week average. 

U.S. winter wheat conditions were unchanged from the week prior at 64 percent g/e vs. 63 percent expected, 64 percent g/e last week and 39 percent last year. 

U.S. winter wheat harvest advanced to only 8 percent complete vs. 14 percent expected), 4 percent last week, 25 percent last year and 20 percent average. 

U.S. spring wheat conditions fell to 77 percent g/e vs. 82 percent expected and 81 percent last week and 78 percent last year. 

ABARE lowered their Australian wheat production and export forecast due to recent dryness. They estimated the crop at 21.2 mmt with exports at 11.0 mmt. This compares to the latest USDA forecast of 22.5 mmt production and 13.4 mmt for exports. 

IKAR lowered Russian wheat production to 80 mmts from 80.5 mmts and exports to 36.5 mmts from 37 mmts.

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 $1.70 lower while feeder cattle closed $1.50 lower. Last week, moderate fed cash cattle trade occurred at mostly $110 live and $180 dressed — $1 to $4 lower than the prior week. 

The Fed Cattle Exchange online auction saw 315 head offered in three lots with no sales noted. One lot from Kansas asked $112, one lot from Nebraska asked $112.75 and went unsold and one lot from Nebraska asked $111.75 and went unsold.

The latest USDA steer carcass weights were up 4 pounds compared to the prior week at 846, making them 5 pounds less than last year. 

The monthly cattle on feed report was constructive for long-term cattle values, although slightly negative when compared to pre-report estimates. On feed supplies came in at 11.74 million head, 101.6 percent compared to last year and pre-report estimates of 101.4 percent. Placements showed 2.064 million head into feedlots, 97.2 percent of last year vs. estimates of 95.9 percent. Marketings were 2.070 million head, 100.7 percent of last year vs. estimates of 100.8 percent. 

STRATEGY & OUTLOOK

Producers can transfer all risk to the cash markets. Higher corn prices means cattle will be sold quicker at lighter weights, resulting in less supply in 2020. 

LEAN HOGS

Lean hogs closed the week $2.15 lower.

Net pork sales of 19,700 MT reported for 2019 were down 15 percent from the previous week and 50 percent from the prior four-week average. Weekly hog weights came in at 284.6 pounds vs. 285.2 pounds last week and 278.5 pounds a year ago.

STRATEGY & OUTLOOK

Producers should maintain hedges until trade agreements are reached with China and Mexico. 

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.

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