CORN — ANALYSIS — Corn closed the week 6 1/2 cents lower. Last week, private exporters reported sales of 195,000 mts of corn to an unknown destination and 597,464 mts to Mexico.
Weekly export sales of corn showed a total of 32.0 mb (814,100 mt) with all for the 2017-2018 marketing year. This put total marketing year sales at 478.9 mb, 41 percent less than the previous marketing year. In the weekly crop progress and conditions report, NASS reported U.S. corn crop conditions improved 2 percent to 63 percent good/excellent vs. 61 percent expected, from 61 percent last week and 73 percent last year. U.S. corn harvest is now 17 percent complete vs. 21 percent expected vs. 11 percent last week and 26 percent average. In the weekly EIA report, ethanol production rose 14,000 bpd to 1.01 bpd vs. 996,000 the prior week; stocks rose 805,000 barrels to 21.55 million barrels. Informa estimated U.S. 2017 corn yield near 170.5 bpa vs. USDA 169.9 bpa. This would place production at 14.182 bb. The October supply/demand report should not be a major market mover as the USDA already has large yields priced into production. Look for slow fund buying to provide producers with a sellable rally over the next several months.
STRATEGY & OUTLOOK
Producers should only make sales that address cash flow need during harvest and store balance of production, but not in commercial storage facilities.
SOYBEANS— ANALYSIS — Soybeans closed the week 5 1/4 cents higher. Last week, private exporters reported sales of 132,000 mts of soybeans to China.
Weekly export sales of soybeans showed a total of 37.3 mb (1,016,100 mt), with all for the 2017-2018 marketing year. This put total marketing year sales at 857.3 mb, 18 percent more than the previous marketing year. In the weekly crop conditions report, NASS reported U.S. soybean crop conditions were unchanged at 60 percent good/excellent vs. 59 percent expected vs. 60 percent last week and 74 percent last year. U.S. soybean harvest is 22 percent complete vs. 25 percent expected, up from 10 percent last week and compared to 26 percent average. The quarterly stocks report placed U.S. soybean stocks as of Sept. 1 came in at 301.3 million bushels, Informa estimated U.S. 2017 soybean yield near 50.0 bpa vs. USDA 49.9 bpa. This would put the 2017 crop at 4.474 bb. The slow harvest pace and steady demand for U.S. soybeans has provided support for prices. Demand won’t slow down anytime soon and producers won’t like to part with fresh harvested product with basis levels extremely wide. This should be enough to rally soybeans.
STRATEGY & OUTLOOK
Producers should have made sales that address cash flow need during harvest. Do not store soybeans in commercial storage.
WHEAT— ANALYSIS — For the week, Chicago wheat closed 5 1/2 cents lower; Kansas City wheat closed 6 cents lower and Minneapolis wheat unchanged. Last week, Egypt bought 180,000 mts of Russian wheat.
Weekly export sales for all wheat showed a total of 18.1 mb (492,300 mt), with all for the 2017-2018 marketing year. This puts total marketing year sales at 514.8 mb, 3 percent below the previous marketing year. In the weekly crop conditions report, U.S. winter wheat seedings are 36 percent complete vs. 38 percent expected, up from 24 percent last week and vs. 43 percent average. Winter wheat seedings are off to a strong start and plenty of Plains moisture should ensure a good start for the winter wheat crop. Spring wheat production in Canada and the U.S. ended up larger than expected, which has pulled prices off of their highs as demand hasn’t been strong enough to chew through the large supplies of inventory. Producers should market stored inventory as basis narrows and as prices rally into resistance.
STRATEGY & OUTLOOK
Look to sell the carry in winter wheat.
LIVE CATTLE — ANALYSIS — Last week, live cattle closed $2.00 higher while feeder cattle closed $2.47 higher. Last week, Fed cattle trade in the South was lightly established at $108, steady with prior week. Full fed cattle trade in the South and dressed trade in the North was not fully established as of press time. The Fed Cattle Exchange online auction saw the largest volume sold in the past five weeks. There was one Nebraska lot on the showlist but the only sales came from Texas and Kansas. 784 head traded, out of the 1,732 on the list (45.27 percent sold). The weighted average price from the total auction sales was $107.898/cwt. Vs. NO SALE from last week's auction. Cash trade averaged $108.15 last week. Net beef sales of 20,800 MT reported for 2017 were up 30 percent from the previous week and 70 percent from the prior four-week average. USDA steer carcass weights were steady with the prior week at 897 and are 7 pounds below a year ago. Some early COF estimates are calling for on feed supplies at 105 percent, placements at 109 percent and marketings at 101 percent.
STRATEGY & OUTLOOK
Producers with cattle to market this fall and winter should have transferred risk on rallies.
LEAN HOGS — ANALYSIS — Lean hogs closed the week $1.45 higher. Weekly hog weights fell slightly last week to 281.9 pounds from 282.1 pounds the prior week and are slightly above last year's 281.0 pounds. Net pork sales of 21,200 MT reported for 2017 were down 42 percent from the previous week and 13 percent from the prior four-week average.
STRATEGY & OUTLOOK
Producers should have hedged 2017 production as prices tested weekly chart resistance.
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.
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