Corn closed the week 9 ¼ cents lower. Private exporters did not announce any sales.
In the weekly export inspections report, U.S. corn exports were 40.5 million bushels (mb) and the lowest in three weeks, but still met the 40 mb per week average that is needed in order for 2019/20 exports to reach the USDA's 1.725 billion bushel (bb) target. Cumulative export inspections of 802 mb are down 36% from last year's 1.257 bb. The USDA is current estimating marketing year total exports to be down 16.5% from last year.
In the first weekly U.S. crop progress and conditions report of the year, U.S. corn planting is only 3% complete versus 3% expected, 3% last year and 4% average. Most of the progress is in the South with 4% done in Missouri and 1% each in Illinois and Indiana.
In the weekly Energy Information Administration report, the massive cutback in U.S. ethanol production continued with ethanol being slashed to 570 thousand barrels per day (bpd) from 672k bpd the week prior and representing a catastrophic 44% decline from last year's same-week production of 1.016 million bpd. Last week's production reflected an annualized rate of just 8.7 billion gallons versus the 16.8 billion gallon annualized rate production was running at its peak in mid-January. Despite the plummeting ethanol production, stocks continued to rise to 1.154 billion gallons from 1.138 billion gallons, with the 16 million gallon weekly stocks increase comparing to the previous two week's 58 million and 66 million gallon adds.
Strategy and outlook: The loss of ethanol production will hurt U.S. corn demand as ethanol usage accounts for 43% of total demand for corn. Any weather related rallies should be used as selling opportunities.
Soybeans closed the week 30 ½ cents lower. Private exporters announced sales of 120,000 metric tons (mts) of soybeans to an unknown destination.
In the weekly export inspections report, U.S. soybean exports last week of 16.2 mb and were considerably below the roughly 25.7 mb per week estimated to average through the end of August in order for the USDA's 1.775 bb export projection to be met. Each of the last six week's exports fell short of the average "needed" pace. Cumulative export inspections of 1.188 bb are now up just 5.5% from last year's 1.126 billion, with USDA now estimating 2019/20 soybean exports will be up only 1.5% year-over-year.
The National Oilseed Producers Association Crush report posted 181.4 mb of soybeans were crushed in March, notably above average market expectations of 175.2 mb, a solid 6.7% above last year's March crush of 170.0 million and easily a new all-time monthly record in surpassing January's 176.9 mb. However, crush margins have been easing of late and have moved below year ago levels over the last week. NOPA reported its members produced 2.096 billion pounds of soybean oil in March versus 1.910 billion in February and 2.000 billion pounds last year March, with the average soybean oil yield moving up to 11.56 pounds per bushel from 11.49 in February.
Strategy and outlook: The soybean may draw a few acres away from corn, especially if the month of April proves to be wet across the cornbelt. The COT report has turned decidedly bearish to the soybean market.
For the week, Chicago wheat closed 22 ¾ cents lower, Kansas City wheat closed 12 ¼ cents lower and Minneapolis wheat 25 ¾ cents lower. Exporters announced sales of 120,000 mts of HRW to an unknown destination and Egypt bought a total of 360,000 mts of Russian/French wheat.
In the weekly export inspections report, U.S. wheat exports last week were a six-week high at 22.4 mb. The average "needed" pace of 23.8 mb per week compares to the 17.2 mb per week average over the last seven weeks. Cumulative export inspections of 788 mb are up 7.6% from last year's 733 million, while USDA is estimating 2019/20 exports up 5.2% year-over-year.
In the USDA weekly crop progress and conditions report, U.S. spring wheat planting is 5% complete versus 5% expected, 2% last year and 9% average. South Dakota is 6% done with Washington 57% complete and Idaho 42% done. Winter wheat conditions are unchanged at 62% good/excellent versus 62% expected, 62% last week and 60% last year. Kansas is 50% g/e, Missouri 49%, Oklahoma 75%, Texas 66%, Nebraska 75% while SRW is 61% in Illinois, 68% in Indiana and 74% in Ohio.
Strategy and outlook: Supply rallies to be sold as the winter wheat crop is off to a great start and the Russian wheat crop appears to be the second largest on record, which will dominate world exports in the second half of 2020.
Last week, live cattle closed $2.10 higher while feeder cattle closed 67 cents higher.
The monthly Cattle On Feed report will be released on Friday, April 24. My estimates for the monthly COF report calls for on feed at 95.5%, placements at 81.2% and marketings at 111.3%.
Very light fed cattle cash trade occurred at mostly $105 live and $155 to $168 dressed - steady to $13 lower than last week.
The Fed Cattle Exchange Auction had 5,778 head listed for sale in 44 lots. 898 head sold in six lots all at $105. Texas sold 403 head at $105, Nebraska sold 210 head at $105 and Oklahoma sold 285 head at $105.
The latest USDA steer carcass weights were down 2 pounds compared to the prior week at 889, making them 24 pounds above last year.
Last week's net sales of 20,200 mts were reported for 2020.
Strategy and outlook: Cattle futures are rallying in anticipation of the economy re-opening and demand returning to more normal patterns. If packers can find a way to stay open amid the coronavirus concerns, cattle won't be backed up.
Lean hogs closed the week $5.57 lower.
Iowa/Minnesota weekly hog weights were up slightly at 284.9 pounds versus 284.7 pounds last week and 286.5 pounds last year.
Last week's net sales of 45,700 mts were reported for 2020 with pork shipments at 38,300 mts. China bought 16,400 mts, while taking shipments of 18,400 mts.
Strategy and outlook: The lean hog market has lots of problems, but export demand is not one of them. Surging exports and very strong shipments should limit the downside for futures. If packers can find a way to stay open amid the coronavirus concerns, suppoy won't be backed up.