CORN

Corn closed the week 1 3/4 cents higher. Last week, private exporters announced sales of 115,800 mts of corn to an unknown destination, 686,000 mts of corn to China and 109,135 mts of corn to Mexico. 

In the weekly export inspections report, U.S. corn exports, for the week ended April 30 were solid at 47.9 million bushels and were a four-week high. Cumulative export inspections of 927 million bushels continue to trim the year-over-year deficit, but it is still a solid 34% relative to last year's 1.403 billion bushels for late April. Given the solid pace of sales and shipment activity of late, it is likely the USDA will leave their export projection unchanged in the May 12 WASDE report.

In the weekly crop progress and conditions report, U.S. corn planting advanced to 51% complete vs. 48% expected, 27% last week, 21% last year and 39% average. Key states of Iowa moved to 78% done vs. 46% on average, Minnesota 76%, Nebraska 61%, Missouri 44%, Illinois 56% and Indiana 33%. Corn emergence is 8% vs. 10% on average. Cool Midwest temps will slow emergence into the middle of May. An estimated 49.7 million acres of corn have been planted so far vs. 39.2 million which would have been planted if corn planting were moving at a normal pace. Roughly 47.3 million acres of corn remains to be planted based on the USDA's March 31 Prospective Plantings report estimate.

In the weekly EIA report, U.S. ethanol production for the week ended May 1 rebounded to 598,000 bpd (176 million gallons/week) from 537,000 bpd (158 mil gal/week) the week prior, reflecting the highest production in four weeks. This was still a massive 42.5% below last year's same-week production of 1.036 million bpd (305 mil gal/week). Over the last four weeks, ethanol production ran, on average, 45% below last year. This week's production implied roughly 59 million bushels of corn was used by the ethanol industry, 44 million bushels less than the same week last year, bringing the 2019/20 marketing year-to-date estimated decline in corn for ethanol production to around 225 million bushels. U.S. ethanol stocks fell last week to 1.076 billion gallons (25.612 mil barrels) from 1.106 billion gallons (26.337 mil barrels) the week prior, the second consecutive week of respectable stocks declines, with stocks now sitting at the lowest level in six weeks. However, ethanol stocks are still 14% (132 million gallons) above year ago stocks at this time of 944 million gallons. – Thanks to Randy Middelstadt

STRATEGY & OUTLOOK

Rapid planting pace and likely the second largest planted acreage in history leaves a bearish supply scenario at a time when ethanol demand is half of year ago. The economy is slowing opening back up but it will likely be late summer before energy consumption returns to more normal patterns. The bearish supplies suggest to sell weather related rallies with a drought the best chance for a long term rally. 

 

SOYBEANS

Soybeans closed the week 1 1/2 cents higher. Last week, private exporters announced sales of 378,000 mts of soybeans to China and 120,000 mts of soybeans to an unknown destination.  

In the weekly export inspections report, U.S. soybean exports last week were just 11.7 million bushels and were notably below the roughly 27.1 million bushels/week estimated soybean exports will need to average in order to reach the USDA's 1.775 billion bushel export projection. Last week's exports were the second lowest of the 35 weeks so far of the 2019-20 marketing year. Cumulative exports of 1.242 billion bushels are still up 5.2% from last year's 1.181 billion at this time. 

In the weekly crop progress and conditions report; U.S. soybean planting moved to 23% complete vs 21% expected, 8% last week, 5% last year and 11% average. This is the fastest soybean seeding pace in history. Key states show Iowa 46% done vs. 9% on average, Minnesota 35%, Nebraska 32%, Illinois 31% and Indiana 22%. For soybeans, an estimated 18.5 million acres of soybeans have been planted so far vs 8.3 million which would have been planted if planting were moving in line with average levels. Roughly 65.0 million acres of soybeans remain to be planted based on the USDA's March 31 Prospective Plantings report estimate. 

In the monthly Census Crush Report, USDA reported U.S. soybean crush in March was 192.2 million bushels, slightly above the average trade estimate of 191.5 million (191.0-192.5 million range of ideas), a solid 7.1% above last year's March crush of 179.4 million and easily reflecting a new all-time monthly record in exceeding January's 188.8 million bushels. February crush was 175.3 million bushels, 7.7% above last year. USDA reported 411.8 million bushels of corn was used for ethanol production in March vs. 432.7 million in February and was 6.8% (30.2 million bushels) below last year's March usage of 442.0 million bushels as the last week of March featured the start of the massive downturn in ethanol production as a result of the impacts of the stay-at-home orders nationwide. Through March, 2019/20 marketing year-to-date corn for ethanol usage of 3.095 billion bushels was down 22 million bushels from last year's 3.116 billion.

STRATEGY & OUTLOOK

Producers are actively seeding this year's soybean crop at a near record pace. The fast planting pace and increased soybean acres leaves a potentially bearish supply situation without the aid of strong export demand. The COT report remains bearish to the soybean market with funds holding a large net long position. 

 

WHEAT

For the week, Chicago wheat closed 7 1/2 cents higher, Kansas City wheat closed 1 3/4 cents lower and Minneapolis wheat 9 1/4 cents higher. Last week, exporters did not announce any export sales.

In the weekly export inspections report, U.S. wheat exports last week were 19.7 million bushels. Unfortunately, they were still solidly below the roughly 26-27 million bushels/week estimated wheat exports will need to average over the final four weeks of the 2019-20 marketing year in order to reach the USDA's 985 million bushel export projection. Cumulative export inspections of 847 million bushels are up 5% from last year's 807 million.

In the USDA weekly crop progress and conditions report, U.S. spring wheat planting is 29% complete vs. 30% expected, 14% last week, 19% last year and 43% average. South Dakota advanced to 60% done, Minnesota 21% and North Dakota only 15%, well behind the average pace of 33% done. Spring wheat emergence is slow at 6% done vs. 16% on average. 

Winter wheat conditions improved 1% to 55% good/excellent vs. 53% expected, 54% last week and 64% last year. Nebraska lost 6% to 66% g/e and Missouri lost 1% to 52%; while Nebraska improved 3% to 67%, Kansas was up 2% to 42%, Oklahoma up 2% to 64%, Illinois up 5% to 38% and Indiana was unchanged at 67%. 

Stats Canada reported seeding intentions were reported at 25.427 million acres vs. 24.604 million last year and in line with estimates of 25.36 million. 

STRATEGY & OUTLOOK

HRW futures should gain against SRW as SRW supplies look to build as the SRW crop will be much larger than a year ago and HRW crop smaller. Frost in parts of western Kansas and dryness in the Texas/Oklahoma Panhandle have taken off the top end of yields. 

LIVE & FEEDER CATTLE

Last week, live cattle closed $7.17 higher while feeder cattle closed $9.25 higher.

Last week, the bulk of fed cattle trade in the North was $95 live and $150 dressed, with some up to $115 and $180 - steady to $20 higher. Trade in the South occurred at $95 to $115 late in the week — steady to $10 higher.

Last week, the Fed Cattle Exchange Auction had 5,119 head listed for sale in 39 lots. A total of 679 head sold in four lots. Texas sold 384 head at $95 to $95.25; Nebraska didn't sell any, Kansas sold 295 head at $95 and Oklahoma didn't sell any.

Early estimates for the monthly Cattle on Feed report show on feed at 94.1%, placements at 71.8% and marketings at 74.6%. 

The latest USDA steer carcass weights were up 2 pounds compared to the prior week at 891, making them 37 pounds above last year.

This week's net sales of 5,200 mts was reported for 2020. 

STRATEGY & OUTLOOK

Boxed beef soared to new highs as reduced slaughter continues to plague the industry. Supplies are being back up and weights are rising. Producers should use options to lock in the latest rally in the summer months.

LEAN HOGS

Lean hogs closed the week $1.02 lower. 

Iowa/Minnesota weekly hog weights for week ending May 2 saw weights at 291.4 pounds vs. 286.1 pounds last week and 285.8 pounds last year.

This week's net sales of 47,500 mts was reported for 2020 with pork shipments at 39,300 mt. China bought 40,200 mt, while taking shipments of 17,500 mt.

STRATEGY & OUTLOOK

The lean hog market has very strong export demand and surging product values. Packers are safely re-opening packing houses which will allow the market to work through existing supplies. 

Midwest Market Solutions is the leading edge in commodity marketing and trading, 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, Missouri, with branch offices in Yankton, South Dakota; Storm Lake, Iowa; Pocahontas, Iowa; Omaha, Nebraska; Thief River Falls, Minnesota; Roseau, Minnesota; Verona, North Dakota; Watseka, Illinois and Ennis, Montana. 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 Inc. Brian can frequently be heard on radio stations across the country including KAYL, KKIA, Ag News 890, Red River Farm Network, Your Ag Network, WHO Big Show, Commodity Wrap on Sirus XM radio and the Ag News Daily podcast. Brian can also be heard daily on the DTN doing his own market commentary program, seen as a frequent guest on RFD-TV and 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.

Brian started his career in the banking industry and was a vice president of a northwestern Iowa bank and also worked for American General Finance. Brian grew up on a grain farm in northwestern Iowa.