Corn closed the week 2 ¾ cents lower. Private exporters did not announce any private sales.
In the weekly crop progress and conditions report, U.S. corn conditions were 56% good or excellent versus 54% expected, 55% last week and 68% last year. U.S. corn harvest is only 30% complete versus 34% expected, 22% last week, 48% last year and 47% average. U.S. corn exports were only 20.9 million bushels (mb) and well below last year's same-week exports of 40.8 mb.
Cumulative exports, through seven weeks of 2019/20, are just 120 mb, down 62% from last year's 313 mb at this time, with this week's exports again well below the roughly 36 mb per week exports need to average in order to reach the USDA's 1.9 billion bushel (bb) export projection.
Yield estimates continue to trend lower and the November supply and demand report will likely show a slightly smaller corn crop compared to a month ago. Farmer selling will slow once harvest is complete, basis levels will likely improve and the cash market should rally as it will be the only way to pry cash crop out of farmers’ hands with stronger basis levels throughout the winter.
Strategy and outlook: Look to sell inventory at resistance levels. Even with smaller than expected yields, stocks are large enough with the poor demand pace.
Soybeans closed the week 11 cents lower. Private exporters announced sales of 128,000 metric tons (mts) of soybeans to unknown destination and 264,000 mts of soybeans to China for 2019/20.
In the weekly crop progress report, U.S. soybean conditions were unchanged at 54% good or excellent versus 53% expected, 54% last week and 66% last year. U.S. soybean harvest advanced to 46% complete versus 42% expected (35-50% range), 26% last week, 51% last year and 64% average.
U.S. soybean exports were a marketing-year high of 47.6 mb. Through the first seven weeks of 2019/20, cumulative exports of 237 mb are up a modest 7% from last year's 221 million at this time, while shipments will need to average roughly 33 mb per week in order to reach the USDA's 1.775 bb export projection.
Yield estimate continue to trend lower and the November supply and demand report will likely show a slightly smaller soybean crop compared to a month ago. Farmer selling will slow once harvest is complete, basis levels will likely improve and the cash market should rally as it will be the only way to pry cash crop out of farmers hands with stronger basis levels throughout the winter.
Strategy and outlook: The COT report has turned decidedly bearish for the soybean complex with aggressive commercial selling offsetting the strong fund buying.
For the week, Chicago wheat closed 14 ¼ cents lower; Kansas City wheat closed 11 cents lower and Minneapolis wheat 7 ¾ cents lower. Exporters did not announce any private sales.
U.S. spring wheat harvest is only 96% complete versus 97% expected (96-98% range), 94% last week, 100% last year and 100% average. U.S. winter wheat planting moved to 77% complete versus 77% expected, 65% last week, 71% last year and 75% average.
U.S. wheat exports last week of 20.8 mb were actually the best in 10 weeks. Cumulative exports of 370 mb are up 22% from last year's 302 million at this time, with the average "needed" export pace of 17.5 mb per week comparing to last year's 19.0 million per week average from this point forward.
While demand is the major driving force for wheat, ample moisture across the key winter wheat growing states like Kansas, Oklahoma, and Texas will be needed to improve crop ratings before wheat goes into dormancy by the end of November.
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.
Last week, live cattle closed $2.82 higher while feeder cattle closed $2.27 higher. The Fed cattle trade in the North was mostly $110 to $111 live and $175 dressed, steady to $2 higher than the week prior. Trade in the South was $109 to mostly $110 - $1 to $2 higher.
The Fed Cattle Exchange Auction had a total of 231 head listed with 1 lot from Kansas which offered 100 heifers at $105, all of which were PO'd. One lot from Texas sold 131 heifers at $109.
The latest U.S.DA steer carcass weights were up 2 pounds compared to the prior week at 901, making them 2 pounds above last year. This week, net beef sales of 13,800 metric tons (MT) reported for 2019 were up 6% from the previous week and up noticeably from the prior four-week average.
The monthly cattle on feed report came in as expected, highlighted by the second consecutive year-over-year monthly decline in on feed supplies. On feed as of October 1 came in at 98.9%, very close to estimates of 98.8%; placements were 102.0% versus estimates of 101.5% and marketings for September came in at 101.1% versus estimates of 100.8%.
Strategy and outlook: Markets are embarking on a counter-seasonal rally.
Lean hogs closed the week $2.70 lower.
Iowa/Minnesota weekly hog weights came in at 285.4 pounds versus 283.6 pounds the week prior and 282.9 pounds last year.
Net pork sales of 19,200 MT reported for 2019 were down 93% from the previous week and 80% from the prior four-week average.
The cold storage report showed total red meat supplies were down 2% from last month and down 4% from 2018. Beef supplies were down 8% and pork supplies were up 2% from last year.
Strategy and outlook: Producers should have moved all risk to the cash markets.
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.