Corn closed the week 3 cents lower. Private exporters announced sale of 150,000 metric tons to Columbia.
In the weekly export inspections report, U.S. exports for the week ending Nov. 4 were 22.2 million bushels, down from the previous week’s 26.4 million and the lowest in seven weeks.
Through the first 10 weeks of the 2021-22 marketing year, exports have averaged only 24 million bushels per week versus 32.3 million last year. Corn exports will now need to average 50.4 million bushels per week through August to reach the USDA’s 2.5 billion bushel export projection. That’s not much different than last year’s 53.2 million per week average. Cumulative export inspections of 238 million bushels are now down 21% from last year’s 299 million.
In the weekly crop progress and conditions report, harvest moved to 84% complete versus 85% expected, 74% last week and 78% average.
In the weekly Energy Information Administration report, ethanol production unexpectedly declined solidly to 1.039 million barrels per day from 1.107 million the week prior. That’s the lowest in four weeks and only 6.3% above last year’s same-week production of 977,000 barrels. This comes after the previous four weeks’ production ran 10-20% above year-ago levels.
Ethanol stocks rose solidly to 852 million gallons from 845 million gallons the week prior, hitting a nine-week high while holding at a minor 1% increase relative to year ago same-week stocks of 847 million gallons.
In the monthly supply and demand report, USDA raised the corn yield to 177 bushels per acre, which is a new record high with production up 43 million bushels. Ethanol usage was increased by 50 million bushels, and feed usage was also increased by 50 million to offset the supply increase. That leaves the carryout 7 million bushels lower than a month ago at 1.493 billion, above the average guess of 1.48 billion.
Strategy and outlook: 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.
With the huge demand base and corn now locked away in farmer storage, the corn market will need to bid for acres this spring to rebuild the ending stocks at a more comfortable level. In November, weakness in prices will be used as a buying opportunity for end users.
Soybeans closed the week 24 cents lower. Private exporters announced sale of 22,000 metric tons of soybean oil to an unknown destination and 256,930 metric tons of soybeans to an unknown destination.
In the weekly export inspections report, exports were strong at 97.3 million bushels, nearly unchanged from the previous week’s 95.8 million and comparable to last year’s same-week exports of 104.8 million.
Cumulative export inspections of 509 million bushels are still down 31% from last year's 736 million. Soybean exports will need to average roughly 35.5 million bushels per week for the remainder of the marketing year in order to reach the USDA’s 2.09 billion bushel export projection. That’s versus last year’s 33.2 million per week average.
In the weekly crop progress and conditions report, harvest was 87% complete versus 89% expected, 79% last week and 88% average.
In the monthly supply and demand report, yield was lowered to 51.2 bushels per acre, down 0.3 bushels from last month. Exports were lowered 40 million bushels to 2.05 billion, and carryout increased by 20 million to 340 million bushels. The world carryout also declined to 103.8 million metric tons.
Strategy and outlook: Farmer selling will slow now that 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.
The market will be anticipating a record soybean crop in South America and updates on this year’s production from South America will be a major driving force for prices throughout the winter. Weather during the South American growing season will be closely watched. Like corn, soybeans too should bid up for acres this spring.
Chicago wheat closed a half cent higher, Kansas City wheat closed 8 cents higher, and Minneapolis wheat 22 1/4 cents higher. Private exporters did not announce any sales.
In the weekly export inspections report, exports of 8.5 million bushels were quite weak again. Wheat exports have averaged only 6.4 million bushels per week over the last four weeks versus 11.6 million during the same period last year.
Cumulative export inspections of 364 million bushels are now down more than 15% from last year’s 430 million through 23 weeks of the marketing year. In order to reach the USDA’s 875 million-bushel export projection, which would be down nearly 12% from last year’s 992 million, wheat exports will need to average roughly 15.6 million bushels per week through the end of May. That’s compared to last year’s 17.1 million per week average.
In the weekly crop progress and conditions report, winter wheat conditions were unchanged at 45% good or excellent versus 46% expected, 45% last week and 45% last year. Winter wheat seedings moved to 91% complete versus 93% expected, 87% last week and 91% average.
In the monthly supply and demand report, the domestic wheat carryout increased by 3 million bushels to 583 million, just above estimates. Exports were lowered 15 million to 860 million bushels. Russia’s wheat production was raised 2 million metric tons in the report to 74.5 million while world wheat carryout was 275.8 million, down 1.38 million from last month.
Strategy and outlook: 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. Unless crop ratings improve, the market will fear farmers will destroy the winter wheat crop in the spring and plant corn and soybeans instead, making the winter wheat crop that much smaller, which will be a bullish development for prices.
Live and feeder cattle
Live cattle closed 65 cents higher while feeder cattle closed 2 cents higher.
Active fed cattle cash trade occurred in the North at mostly $132 live and $206 to $207 dressed – $2 higher live and $4 to $5 firmer for dressed compared to the prior week. Trade in the South was moderate at $132 mainly – $2 to $4 higher.
The Fed Cattle Exchange weekly auction had 1,866 head listed for sale and sold 741 head at $131.
The latest USDA steer carcass weights were down 4 pounds at 918 pounds, which is 11 pounds below a year ago.
Last week’s beef export sales saw a net sales of 20,600 metric tons reported for 2021 with shipments of 17,000 tons. Beef export sales saw a net sales of 16,700 metric tons reported for 2021 with shipments of 16,800 tons.
Strategy and outlook: Producers should have window or fence strategies to protect the downside but allow for upside potential as tight supplies in the fourth quarter and first quarter of 2022 should be bullish for values but the economy is struggling.
Lean hogs closed the week $3.55 lower.
Iowa and southern Minnesota weekly hog weights for week ending Nov. 6 rose to 290.1 pounds compared to 289.6 pounds last week and 287.7 pounds last year.
Net pork sales of 23,300 metric tons were reported for 2021 with shipments of 32,000 tons.
Strategy and outlook: The hog market continues to struggle under the weight of soft fundamentals.
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.