CORN-----------------------------

Corn closed the week 13 cents higher.  Private exporters announced sales of 120,000 metric tons (mts) of corn to Mexico.

In the weekly export inspections report, U.S. corn exports were extremely weak at 15.7 million bushels (mb) but rebounding modestly from the previous week's dismal 9.3 mb. Cumulative exports through the first four weeks of the 2019/20 marketing year have reached just 60 mb versus 175 million at this time last year, a nearly 66% decline. Given the extremely slow start to this year's export program, even with the USDA's 2.05 billion bushel (bb) export projection being nearly unchanged from 2018/19 exports, the overall shipment pace will likely need to run more than 9% stronger than last year's throughout the October-August time frame as exports are already more than 100 mb behind last year's pace.

In the weekly crop progress and conditions report, U.S. corn conditions were unchanged at 57% good or excellent versus 57% expected, 57% last week and 69% last year. The U.S. corn harvest advanced to 11% complete versus 14% expected, 7% last week, 25% last year and 19% average. 43% of the crop is rated as mature, behind the normal pace of 73%.

In the quarterly stocks and small grains report, USDA reported Sept. 1 corn stocks at 2.114 bb, well below the average trade estimate of 2.428 bb and the June 1 stocks estimate of 5.202 bb. This was the largest miss by the trade for the September report in history and led to sharp buying interest by funds that are holding a net short position. Funds are still holding a net short position, which should lead to additional short covering.

Strategy and outlook: Look to sell inventory at resistance and retracement levels.

SOYBEANS--------------------------

Soybeans closed the week 33 cents higher. Private exporters announced sales totaling 716,000 mts of soybeans to China.

In the weekly export inspections report, U.S. soybean exports last week were decent at 36.1 mb and up slightly from the previous week's 34 mb. Soybean exports through the first four weeks of 2019/20 have averaged 32.7 mb per week versus 28.1 billion per week last year during the same period, with cumulative exports at 116 mb versus 109 million a year ago. Based on the USDA's 1.775 bb export projection, we estimate soybean shipments will need to average roughly 33.5 mb per week throughout October-August versus last year's 32.5 million per week average from this point forward.

In the weekly crop progress report, U.S. soybean conditions improved 1% to 55% good or excellent versus 54% expected, 54% last week, and 68% last year. U.S. soybean harvest is 7% complete versus 6% expected, 22% last year and 20% average. 55% of the soybean crop is dropping leaves versus 76% normally.

In the Quarter Stocks Report, Sept. 1 soybean stocks were also supportive to prices, coming in at 913 mb, well below the average trade estimate of 982 mb and the June 1 stocks estimate of 1.790 bb. This was well above last year's figure of 438 mb. Like with corn, this was the single largest miss by analysts prior to a report for September in history. Part of the reason for the stocks coming in well below estimates was the USDA revision of the 2018 soybean crop to 4.428 bb.

The USDA reduced yields by 1.3 bushels per acre (bpa) to 50.3 bpa and lowered residual use by 24 mb. Commercials continue to sell into the rally, adding to net short positions and creating a bearish index reading.

Strategy and outlook: October meetings would be the perfect time for the US and China to reach a trade agreement. If an agreement is reached, look to sell into the ensuing rally.

WHEAT------------------------------

For the week, Chicago wheat closed 3 ¾ cents cent higher; Kansas City wheat closed 3 ½ cents lower and Minneapolis wheat 11 cents lower. Egypt bought 60,000 mts of French wheat and China bought 130,000 mts of U.S. white wheat.

U.S. wheat exports last week were 17.1 mb and little-changed from the previous week's 18.0 mb. Cumulative exports of 312 mb remain up 23% from last year's slow-starting 254 million through the first 17 weeks of the marketing year, while wheat shipments will need to average roughly 18.4 mb per week through the end of May in order to reach the USDA's 975 mb export projection versus last year's 18.7 mb per week from this point forward.

In the weekly crop progress and conditions report, U.S. spring wheat harvest is 90% complete versus 92% expected, 87% last week, 100% last year and 99% average. U.S. winter wheat planting is 39% complete versus 36% expected, 22% last week, 41% last year and 38% average. 11% of the crop has emerged versus 13% normally.

The USDA issued small grain production summary, normally the last production summary until the January final crop report. However, the USDA said, shortly after the release of the data, they will make plans to re-assess the spring wheat and durum acres, with updated estimates to be revealed in the November monthly S&D report due to the late harvest of the spring wheat crop. Wheat production estimates were 1.962 bb for all wheat and 1.304 bb for all winter wheat. Class by class estimates were 833 mb for HRW, 239 mb for SRW, 236 mb for white winter, 600 mb for other spring and 57 mb for durum.

Wheat stocks were 2.385 bb, above estimates of 2.318 bb and nearly identical to last year's 2.390 bb.

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 47 cents higher while feeder cattle closed $2.00 lower.

Fed cattle trade occurred in the South at $106 to $107 - mostly $2 to $4 higher than the prior week. A moderate trade in the North was noted at $170 dressed - $5 higher versus the prior week. Feeder cattle traded mostly steady to $3 higher.

The Fed Cattle Exchange saw 846 head offered for sale in 4 lots. All lots went unsold. 2 lots in Nebraska asked $107 and $111; 1 lot from Kansas asked $106 and 1 lot from Texas asked $107.

The latest USDA steer carcass weights were up 5 pounds compared to the prior week at 896, making them steady with last year. Net beef sales of 12,500 metric tons (MT) reported for 2019 were down 34 percent from the previous week and 30 percent from the prior four-week average.

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

HOGS-----------------------------

Lean hogs closed the week $2.55 lower. Last week, Iowa and Minnesota weekly hog weights came in at 281.9 pounds versus 280.5 pounds week prior and 280.0 pounds last year.  Net pork sales of 31,000 MT reported for 2019 were down 4% from the previous week, but up 44% from the prior four-week average. 

China bought 3,500 mts of U.S. pork and shipped 6,000 mts.

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.