CORN-------

Corn closed the week ¾ of a cent higher.  Private exporters did not announce any private sales. 

In the weekly crop progress report, U.S. corn conditions are 58% good or excellent versus 56% expected, up from 56% last week. U.S. corn harvest is only 41% complete versus 43% expected, 30% last week, 61% last year and 61% average. Iowa is only 26% harvested with North Dakota 6%, South Dakota 14%, Minnesota 22% and Nebraska 44% harvested with Illinois 54% done, Ohio 48% and Missouri 64% complete.  

U.S. corn exports last week of 15 million bushels (mb) were down from the previous week's 22.8 mb, as well as last year's 29.1 mb and were the second-lowest of the first eight weeks of the 2019/20 marketing year. Cumulative exports of 137 mb are down 60% from last year's 342 mb at this time and are the lowest for the first eight weeks into the marketing year on record going back more than 40 years. Even with the USDA's 1.9 billion bushel (bb) export projection reflecting a solid decline from last year's 2.065 bb, corn exports are estimated to still need to average 36.6 mb per week through the end of August to reach this 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. 

Informa estimated U.S. corn crop yield near 168.6 bushels per acre (bpa) versus USDA 168.4 bpa with a crop size of 13.792 bb versus USDA 13.779 bb estimate.

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-----

Soybeans closed the week unchanged. Private exporters announced sales of 132,000 metric tons (mts) of soybeans to unknown destination and 132,000 mts of soybeans to China for 2019/20. Exporters also announced sales of 135,000 mts of meal to the Philippines. 

In the weekly crop progress report, U.S. soybean harvest is now 62% complete nationwide versus 62% expected, 46% last week, 69% last year and 78% average. Iowa is 66% done, Illinois is 69%, Ohio 71%, Nebraska 85% with Minnesota 62%, Missouri 43%, South Dakota 58% and North Dakota 29% complete. 

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. U.S. soybean exports were a marketing year high of 57.6 mb and were up from the previous week's 48.9 mb and last year's 49.7 mb.  Cumulative exports now at 296 mb versus 271 mb at this time last year. Soybean exports will need to average roughly 32-33 mb per week through the end of August in order for the USDA's 1.775 bb 2019/20 export projection to be reached. 

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. 

Informa estimated U.S. soybean yield near 47 bpa versus USDA 46.9 bpa and production of 3.553 bb versus USDA 3.550 bb.

Strategy and outlook: The COT report has turned decidedly bearish for the soybean complex with aggressive commercial selling offsetting the strong fund buying.

WHEAT-----

For the week, Chicago wheat closed 1 ½ cents lower; Kansas City wheat closed 2 cents higher and Minneapolis wheat 12 ¾ cents lower. Egypt bought 235,000 mts of Russian/Romanian and French wheat. 

The first U.S. winter wheat conditions of the year showed 56% good or excellent versus 57% expected and 53% last year. Kansas is 55% good or excellent while Missouri is only 43%, Nebraska 61%, Oklahoma is 61% and Texas is only 37% good or excellent. 

U.S. winter wheat planting is now 85% complete versus 87% expected, 77% last week, 77% last year and 82% average. 

U.S. wheat exports last week of 19.2 mb were in the lower portion of market expectations and were down slightly from the previous week's 21.3 mb while being above last year's same-week exports of 14.5 mb. Wheat exports continue roughly in line with the USDA's 950 million bushel export projection, having averaged 18.8 mb per week over the last six weeks and 18.1 million/week through 21 weeks of the 2019/20 marketing year versus the average weekly "needed" pace of 17.4 mb per week. Cumulative exports of 390 mb are up 23% from last year's 317 mb. 

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.

LIVE CATTLE------

Last week, live cattle closed $3.47 higher while feeder cattle closed $4.25 higher. Fed cattle trade in the North was mostly $114 live and $180 dressed, thus far - $3 to $5 higher than last week. Trade in the South was mostly $112 - $2 higher. 

The Fed Cattle Exchange Auction had a total of 433 head listed for sale. 2 lots from Kansas of 184 head sold at $112. 1 lot from Kansas was PO'd at $112.75 and 1 lot from Texas was PO'd at $112.25.  Last week. USDA steer carcass weights were down 1 pound compared to the prior week at 900, making them 6 pounds above last year. Net beef sales of 15,700 metric tons (MT) reported for 2019 were up 14% from the previous week and up noticeably from the prior four-week average.

Strategy and outlook: Markets are embarking on a counter seasonal rally.

HOGS-------

Lean hogs closed the week 85 cents lower. Iowa/Minnesota weekly hog weights came in at 286.4 pounds versus 285.4 pounds the week prior and 283.4 pounds last year.  

Net pork sales of 30,100 MT reported for 2019 were up 57% from the previous week, but down 68% from the prior four-week average.

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

Sign up for our Weekly newsletter

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

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.