Soybean shipping

Members of the South Dakota Soybean See for Yourself tour examine aspects of the shiploading structure of the TEMCO Cargill and CHS facility at the Port of Tacoma.

Soybeans closed the week 40 ¾ cents higher. Private exporters announced sale of 204,000 metric tons to China, 138,000 to Mexico and 195,750 of meal to Mexico.

In the weekly export inspections report, exports were 33.3 million bushels and were down from the previous week's 47.4 million and slightly below last year's same-week exports of 34.1. Based on the USDA’s 1.775 billion bushel export projection this year, exports will likely need to average 33-34 million bushels per week over the entirety of the marketing year versus last year's 32.2 million average.

In the weekly crop conditions report; conditions were unchanged at 55% good or excellent versus 55% expected, 55% last week and 68% last year. In contrast to corn, soybean conditions hit highest of the year so far. This comes despite eastern soybean belt states falling 5% in Illinois and 1% in Indiana.

In the monthly WASDE report; the USDA placed the U.S. soybean yield at 47.9 bushels per acre, within estimates of 45.5 and 49 and up slightly from 47.2 bpa estimated prior to the report. Production was placed at 3.633 billion bushels, above estimates of 3.578 bb but down from a month ago when the estimate was 3.68 bb. U.S. 2018-2019 ending stocks were 1.005 billion bushels down from last month's 1.07 bb figure as the USDA increased crush and export demand, while the U.S. 2019-2020 ending stocks were 640 million bushels, slightly less than the estimate prior to the report of 660 mb and down 115 mb from last month. It was still the second largest figure in history. The world ending stocks were 99.2 million tonnes, within estimates of 89.6 to 119.

Strategy and outlook: October meetings would be the perfect time for the U.S. and China to reach a trade agreement. A bullish technical weekly reversal suggests the lows are in for the fall.

Corn

Corn closed the week 13 ¾ cents higher. Private exporters announced sales of 1,042,906 metric tons to Mexico.

In the weekly export inspections report, U.S. corn exports for the week ending Sept. 5 – the first week of the 2019-20 marketing year – came in at 23.2 million bushels, up from the previous week's poor 14.1 million bushels.

Based on the USDA’s 2019-20 export projection of 2.050 billion bushels, corn export inspections will need to average roughly 36-37 million bushels per week throughout the marketing year.

In the weekly crop progress and conditions report, corn conditions fell 3% to 55% good or excellent versus 58% expected, 58% last week and 68% last year. Conditions in Illinois were down 8% on the good-to-excellent rating. This was the lowest corn conditions of the year so far.

Only 11% of the crop is considered mature versus 24% on average while 55% is dented versus 77% on average.

In the monthly WASDE report, the USDA placed the corn yield at 168.2 bushels per acre, within estimates between 162 and 171.5 bushels per acre. This was down from last month's 169.5 bpa figure but above the average trade guess of 166.5. Corn production was placed at 13.799 billion bushels, within estimates of 12.62 and 14 billion bushels but also above trade estimates of 13.557 bb.

U.S. 2018-2019 ending stocks were 2.445 billion bushels as the USDA lower the export profile while the 2019-2020 ending stocks were 2.19 down from last year's 2.445 billion but a small increase from last month's 2.181 billion estimate. Stocks-to-use ratio is 15.5%. World ending stocks were 306.3 million tonnes, within estimates of 292.7 to 310.

Strategy and outlook: A bullish technical weekly reversal suggests the lows are in for the fall.

Wheat

Chicago wheat closed 20 1/4 cents higher, Kansas City wheat closed 6 1/2 cents higher and Minneapolis wheat 11 1/4 higher. Private exporters did not announce sales.

In the weekly export inspections report; U.S. wheat exports last week were 14.8 million bushels, down from the previous week's 20.5 million and last year's same-week exports of 16.2. This was the lowest in eight weeks and the third lowest of the first 14 weeks of the 2019-20 marketing year. Cumulative exports of 257 million bushels are still up nearly 23% from last year's slow-starting 210 million. Wheat exports will need to average roughly 18.4 million bushels per week through the end of May to reach the USDA’s 975 million bushel export projection.

In the weekly crop progress and conditions report, spring wheat harvest advanced to 71% complete versus 69% expected, 55% last week, 92% last year and 87% average. North Dakota is a laggard at 68% with Montana only 62% complete.

ABARE has estimated the Australian wheat crop at 19.2 million tonnes, down from the prior estimate of 21.9 million tonnes on dry weather. SovEcon estimates Russia will export 3.8 mmts of wheat in September, down from 4.78 mmts in August and below last year's September exports 4.56 mmts.

In the WASDE report, USDA placed U.S. 2019-2020 ending stocks at 1.014 billion bushels, unchanged from last month and nearly identical to pre-report estimates. The USDA did not make any changes to demand and production figures will be updated at the end of the month in the small grains summary report. The world ending stocks were placed at 286.5 million tonnes, within estimates of 268 to 288.1.

Strategy and outlook: The huge world supplies of wheat mandates producers to sell out inventory and use options to manage risks on sharp rally attempts.

Live and feeder cattle

Live cattle closed $3.10 higher while feeder cattle closed $3.725 higher. Fed cattle trade in the North was mostly $99 to $100 live and $157 to $160 dressed, $2 to $8 lower than last week. Trade in the South was primarily $99 to $100 – steady to $1 softer versus the weekly prior week.

The Fed Cattle Exchange saw 36 head offered for sale. All cattle were based in two lots in Kansas and two in Texas and all were passed on at $99 per hundredweight.

The latest USDA steer carcass weights were steady at 884 pounds compared to the previous week and are 4 pounds less than last year. Net beef sales of 18,000 metric tons were reported for 2019 were unchanged from the previous week, but up 11% from the prior four-week average.

Strategy and outlook: News that the Holcolm, Kansas plant will remain closed until January is a bearish development.

Lean hogs

Lean hogs closed the week $3.40 higher. Last week, rumors that a possible trade agreement between the U.S. and China is getting closer sent hog futures sharply higher on Thursday and Friday, closing limit up both days.

This week, Iowa and southern Minnesota weekly hog weights were estimated at 281.5 pounds versus. 278.3 pounds last week and 279.1 pounds last year. Net pork sales of 21,900 metric tons reported for 2019 were up 24% from the previous week and 3% from the prior four-week average.

Strategy and outlook: Producers should have moved all risk to the cash markets.

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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.