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Market Forecaster: Soybean prices rally on new-crop exports

Market Forecaster: Soybean prices rally on new-crop exports

Soybean harvest

Corn closed the week 8 3/4 cents higher. Private export sales including 560,000 metric tons to China, 106,000 to Japan and 240,000 to an unknown destination.

Exports were 34.6 million bushels. Through 10 days of 2020-2021, cumulative export inspections of 45 million bushels compares to 35 million last year. In order to reach the USDA’s 2.325 billion bushel projection, we estimate corn exports will need to average roughly 42.8 million bushels per week versus last year’s 31.9 million average.

Conditions fell 1% to 60% good or excellent compared to 55% last year. A total 41% of the crop is mature, ahead of the average 32%. Harvest advanced to 5% complete compared to 3% at this time last year.

Ethanol production fell to 926,000 barrels per day, down from 941,000 barrels the previous week and down from 1,003,000 barrels in the same week last year. Ethanol stocks fell to multi-year low of 19.8 million barrels in the week ending Sept. 11, versus 23.2 million the previous year.

Strategy and outlook: Corn is following soybeans higher at a time when the growing season has effectively come to an end. As harvest begins, the market is likely to begin to work lower under harvest pressure and the weight of the world supply begins to be felt. The cash on trade report turned bearish.

SOYBEANS --------------------------------------

Soybeans closed the week 46 1/4 cents higher. Private exporters announced sales totaling 984,000 metric tons to China and 820,500 to an unknown destination. Exporters also announced sales of 100,000 metric tons of soybean meal cake to an unknown destination.

Exports totaled 47.2 million bushels. Shipments to China accounted for 832,00 tonnes of the total. With the marketing year just getting underway, cumulative export inspections of 68 million bushels compare to 45.6 million at this time last year. In order to reach the USDA’s 2.125 billion bushel projection, exports will need to average roughly 39.3 million bushels per week through the end of August compared to last year’s 30.8 million.

In the crop progress report, conditions fell 2% to 63% good or excellent compared to 54% last year, and 37% of the crop nationally is dropping leaves, slightly ahead of the average of 31%.

The monthly National Oilseed Processors Association crush report came in at 165.055 million bushels, which was below estimates of 169.5 million and behind last month’s 172.8 million and last year’s 168.1 million. This was the lowest crush figure since November 2019. Oil stocks were 1.519 billion pounds, above last year’s 1.401 billion.

Strategy and outlook: A record export pace of new crop soybeans rallied values to 27-month highs. Producers should continue to sell into front month contracts as there is no carry and the market is telling you not to store soybeans. Look to re-own with futures and options.


Chicago wheat closed 34 3/4 cents higher, Kansas City wheat closed 34 cents higher and Minneapolis wheat 19 cents higher. Egypt bought 235,000 metric tons from Russia and Poland.

U.S. exports totaled 23.4 million bushels, down slightly from the previous week’s marketing-year high 25.7 million. Wheat exports have averaged 20.1 million bushels per week, easily keeping pace with the USDA’s 975 million bushel export projection. Shipments will need to average roughly 17 million bushels per week through next May. Last year, they were at 17.3 million bushels per week.

In the crop progress report, spring wheat harvest was 92% complete compared to 66% last year and 75% average. Winter wheat seedings were 10% complete versus 13% expected, 6% last year and 8% average.

Statistics Canada raised its all wheat crop to 34.1 million metric tons versus 32.3 last year. The durum crop is estimated at 6.1 million versus 5 last year.

Strategy and outlook: Values are rallying as dryness is noted in parts of the Black Sea region, and producers should reward any rallies. Supplies are increasing in Russia, Australia and Canada and they will be looking to export supplies to the world.

LIVE CATTLE ------------------------

Live cattle closed $1.77 higher while feeder cattle closed $1.55 higher.

Fed cattle trade in the North was mostly $103 to $104 live and $163 to $165 dressed – $2 to $5 higher than the previous week. Moderate trade in the South occurred at $103 to $103.50 – $1 to $2.50 firmer.

The Fed Cattle Exchange online auction had 613 head listed for sale in six lots. The first four lots went unsold while the last two were purchase-ordered.

The latest USDA steer carcass weights were up 2 pounds from the prior week at 918, making them 25 pounds above last year.

Net beef sales of 14,300 metric tons was reported for 2020 with shipments of 14,100 metric tons.

Strategy and outlook: Seasonal trends turned lower at a time that increased supply and limited restaurant openings force consumers to eat large supplies of beef at home. Producers should have employed hedging strategies that use options and futures.

HOGS ---------------------------------

Lean hogs closed $1.87 lower.

Iowa and southern Minnesota hog weights jumped to 279.7 pounds from 276.7 pounds but were below 281.3 pounds the year prior.

Net pork sales of 50,600 metric tons had shipments at 28,600. This included China buying 35,900 and taking shipments of 8,300.

Strategy and outlook: Strong exports and higher values have rallied futures off their lows. As the market rallies into resistance, producers should at 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.

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