Corn closed the week 3 ¼ cents higher. Private exporters announced sales of 130,000 metric tons (mts) to South Korea.

In the weekly export inspections report, U.S. corn exports last week of 27.2 million bushels (mb) and were above year-ago same-week exports of 22.9 mb. Cumulative export inspections of 298 mb continue to run well above last year's 171 million, leaving exports likely needing to average roughly 44 mb per week through the end of August in order to reach the USDA's current 2.325 billion bushel (bb) export projection versus last year's 34.7 million per week average from this point forward.

In the weekly crop progress and conditions report, U.S. corn crop harvest moved to 91% complete versus 91% expected, 82% last week, 62% last year, and 80% average.

In the weekly Energy Information Administration report, U.S. ethanol production rose to 977,000 barrels per day from 961,000 barrels the week prior, but was still 5.1% below last year's same-week production of 1.03 million barrels. U.S. ethanol stocks posted the largest single-week increase in 12 weeks to 847 million gallons, up 20 million gallons from the previous week's 826 mil gallons, while moving back to the highest level in 10 weeks.

In the monthly supply and demand report, the USDA lowered corn yields to 175.8 bushels per acre (bpa) from 178.4 last month and lowered ending stocks to 1.702 bb from 2.167 bb last month. U.S. corn exports increased by 325 mb but feed/residual was lowered by 75 mb. They lowered Iowa corn yields 2 points to 184 bpa from 186 bpa in October, North Dakota yields down to 145 bpa from 160 bpa in October and Illinois corn yields were down to 195 bpa from 200 bpa in October. In all, 16 states saw lower corn yields compared to October.

Corn stocks/usage ratio is 11.5%, the first time below 12% since 2013/14 when it was 9.2%. Ukraine corn production fell to 28.5 million mts (mmts) versus 36.5 mmts last month. World corn stocks are estimated at 291.4 mmts versus 300.5 mmts last month.

Strategy and outlook: The report was bullish and suggests values will work higher until South American production is assured. Producers should have sold product and look to re-own with futures and options.

SOYBEANS

Soybeans closed the week 44 ½ cents higher. Private exporters announced sales of 123,000 mts to an unknown destination.

U.S. soybean exports were the second-highest of the first 10 weeks of the 2020-2021 marketing year at 91.7 mb and were significantly larger than the same-week year-ago exports of 49.5 mb. Cumulative export inspections of 715 mb are up 78% from last year's 401 million. Soybean exports through the end of August will need to average around 33 mb per week in order to reach the USDA's current 2.200 billion bushel export projection versus last year's 28.2 million per week average from this point forward.

In the weekly crop progress and conditions report, harvest advanced to 92% complete versus 94% expected, 87% last week, 82% last year, and 90% average.

In the monthly supply and demand report, the USDA lowered soybean yields to 50.7 bpa from 51.9 bpa last month, and ending stocks tightened to 190 mb, the smallest since 2015/16. Surprisingly, they did not make any changes to U.S. exports. Iowa soybean yields fell to 54 bpa versus 56 bpa in October, Illinois yields dropped to 58 bpa versus 60 bpa last month. Soybean stocks to use ratio is 4.2%, the tightest ever was 2013-2014 at 2.7% and similar to 2012-2013 stocks to use ratio of 4.6% when stocks were 143 mb. USDA lowered Argentine soybean crop from 53.5 mmts to 51 mmts but left the Brazilian crop at 133 mmts, record large.

Strategy and outlook: Producers should have sold soybeans off the combine as there is no carry and the market is telling you not to store soybeans. Producers should have re-owned production using futures and options in deferred contracts. Funds are record net long and commercials have a record net short positions, which will ultimately prove bearish but the uptrend remains intact.

WHEAT

For the week, Chicago wheat closed 9 cents lower, Kansas City wheat closed 4 ¾ cents lower and Minneapolis wheat 3 ¾ cents lower. Private exporters did not announce any export sales.

In the weekly export inspections report, U.S. wheat exports of 11.2 mb, were well below year-ago exports of 19.8 mb and were the second-lowest of the first 23 weeks of the 2020-2021 marketing year. Cumulative exports of 430 mb are now only slightly above last year’s 421 million after being up more than 10% year-over-year only six weeks prior. Through the end of May, wheat exports will need to exactly average last year's 17.1 mb per week pace in order to reach the USDA's 975 mb export projection, which we anticipate USDA leaving unchanged in tomorrow's WASDE report.

In the USDA weekly crop progress and conditions report, winter wheat seedings are now 93% complete versus 94% expected, 89% last week, 91% last year, and 91% average. Winter wheat conditions improved to 45% g/e versus 44% expected, 43% last week, and 54% last year. Winter wheat emergence is 79% versus 78% average.

Strategy and outlook: Dryness is noted in parts of the Black Sea region and producers should reward supply rallies. Large supplies of wheat in Russia, Australia, and Canada will force them to export supplies to the world.

LIVE CATTLE

Last week, live cattle closed $1.27 higher while feeder cattle closed $2.15 higher.

Last week, moderate fed cattle cash trade in the North occurred at mostly $107 live and $167 dressed – primarily $2 higher, to as much as $9 higher for dressed prices. Moderate trade in the South at $107 was $1 firmer than last week.

Last week, the weekly Fed Cattle Exchange online auction listed a total of 634 head for sale in five lots. 296 head sold with 146 head sold at $106.75 and 150 head sold at $107.25 per hundredweight.

The latest USDA steer carcass weights were up 2 pounds from the prior week at 931, making them 25 pounds above last year and setting a new record.

Last week's beef export sales were 20,400 metric tons (mt) with shipments of 21,400 mts reported, a marketing-year high.

Strategy and outlook: Beef exports have improved exactly when the industry needed them too. Better export demand will offset large supplies of cattle that will hit the market during the winter months. Producers should have window or fence strategies to protect the downside but allow for upside potential.

HOGS

Lean hogs closed the week unchanged.

Iowa and southern Minnesota weekly hog weights increased slightly for the week ending Nov. 7 to 287.7 pounds from 287.3 pounds the week prior and 287.9 pounds last year.

Last week’s net pork sales of 42,500 mts with shipments at 38,100 mts. This included China buying 21,100 mts and taking shipments of 13,100 mts.

Strategy and outlook: Strong exports of US pork and higher product values have rallied futures off their lows. As the market rallies into resistance, producers should at a minimum, use a put/call spread to lock in profits.

Brian Hoops is president and senior market analyst of Midwest Market Solutions Inc. The home office is in Springfield, Mo., with branch offices in Thief River Falls, Minn.; Verona, N.D.; Yankton, S.D.; Storm Lake, Iowa; and Springfield, Neb.