Soybean shipping facility

The $7 million roof at the TEMCO facility spurred unusually rigorous examination of the Pacific Northwest’s climate.

Corn

Corn closed the week of Feb. 22 at 1 cent higher. Last week, private exporters did not announce any private sales.

Corn weekly export inspections totaled 37.1 MB for the week ending Thursday, Feb. 14, equal to 37.1 MB for the same week a year ago. Corn needs to average 45.9 MB each week to reach the USDA export forecast.

In the weekly U.S. Energy Information Administration (EIA) report; U.S. ethanol production, for the week ended Feb. 15, fell notably to 996,000 barrels/day (293 million gallons/week) from 1.029 million bpd (303 mil gal/week) the week prior and was a very solid 6.7 percent below last year's same-week production of 1.068 mbpd. The data reflected the second lowest weekly ethanol production rate of the last 43 weeks. Crude oil stocks saw an increase of 3.7 million barrels vs. an expected increase of 3.1 million barrels.

The USDA Outlook Forum is projecting corn acres at 92.0 million vs. 89.1 million in 2018 and projecting 2019/20 U.S. ending-stocks for corn at 1.650 billion bushels.

Strategy & outlook

Producers should look to sell the carry for spring or summer months and use options to re-own and manage risk. Don't store unpriced crop.

Wheat

For the week ending Feb. 22, Chicago wheat closed 16 cents lower; Kansas City wheat closed 18.5 cents lower and Minneapolis wheat 2.5 cents lower. Last week, Egypt's General Authority for Supply Commodities (GASC) purchased 180,000 metric tons of French wheat; 60,000 MT of Russian wheat; 60,000 MT of Ukrainian wheat and 60,000 MT of Romanian wheat. No U.S. wheat was offered for sale.

Weekly wheat export inspections totaled 13.1 million bushels. This week's inspections were below 15.6 MB for the same week a year ago. Wheat needs to average 25.4 MB each week to reach the USDA export forecast. The Australian Bureau of Agricultural and Resource Economics (ABARE) forecast Australia's wheat output would total 17.3 MMT, down from 21.24 MMT a year earlier. The figure was slightly above the bureau’s December estimate of 16.95 MMT, but still marks Australia’s smallest wheat crop since 2007-08, when production fell to just 13.6 MMT. Australia is the world’s fourth largest exporter.

The USDA Outlook Forum is projecting all wheat acres at 47.0 million in 2019 vs. 47.8 million in 2018 and projecting 2019/20 U.S. end-stocks for wheat at 944 MB.

Strategy & outlook

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

Soybeans

Soybeans closed the week of Feb. 22 at 2.5 cents higher. Last week, private exporters did not announce any private sales.

Soybean weekly export inspections totaled 37.9 MB, up from 35.3 MB for the same week a year ago. Soybeans needs to average 33.2 MB each week to reach the USDA export forecast. Ag Secretary Purdue announced that China will buy another 10 MMT of U.S. soybeans (no specifics on timeline) taking total 2018-19 Chinese purchases of U.S. soybeans to 17.5 MMT (this total does not include any of the 3.0 MMT of U.S. soy exports sales in unknown category). Trump says, “biggest farm deal ever made” and hints that final overall trade deal will be made in face-to-face meeting with President Xi.

The USDA Outlook Forum is projecting 2019 U.S. soybean acres at 85.0 million vs. 89.2 million in 2018 and 2019 U.S. soybean stocks at 845 MB.

Strategy & outlook

Producers should look to sell the carry for spring or summer months and use options to re-own and manage risk.  Don't store unpriced crops. 

Live & feeder cattle

Last week, live cattle closed $1.80 higher while feeder cattle closed 17 cents higher. Last week, the market undertone was $1-$2 higher with prices $125-$126 and $201-$202 dressed.

The Fed Cattle Exchange online auction was held with a total of 693 head listed for sale from 7 yards in Kansas, Nebraska and Oklahoma. Two lots in Kansas and one lot in Oklahoma sold at $125 totaling 323 head. Bids of $125-$125.25 were passed in Nebraska and Kansas.

The Jan. 1 Cattle-on-Feed report was released on Feb. 22 due to the government shutdown. On-feed supplies came in below expectations at 101.8 percent vs. estimates of 102.2 percent. Placements in December totaled 1.767 million head or 98.2 percent of last year, well-below the average estimate of 101.5 percent, which should be bullish to the April contract while December marketings totaled 1.741 million head or 99.4 percent, slightly below estimates of 100.0 percent.

Strategy & outlook

Producers can manage risk by using the options market.

Lean hogs

Lean hogs closed the week of Feb. 22 at $4 lower as the market fell through double bottom support on the weekly charts. Weekly hog weights were up slightly to 286.2 pounds vs. 285.8 pounds a week ago and 285.1 pounds last year. The USDA will release its next monthly cold storage report on March 7. Their annual cold storage report will be delayed until April 2.

Strategy & outlook

Producers should have hedged on rallies in the deferred contacts.

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.

Field editor for the Midwest Messenger.