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Corn exports down, but ethanol production up
Market Forecaster

Corn exports down, but ethanol production up

Shell Rock ethanol

Corn closed the week 3 cents lower. Private exporters announced sale of 299,415 metric tons to Mexico.

In the weekly export inspections report, U.S. corn exports were only 21.5 million bushels, the lowest in five weeks. Cumulative export inspections of 186 million bushels remain down nearly 24% from last year’s 243 million, with export inspections needing to average roughly 49.3 million bushels per week over the remainder of 2021-2022 to reach the USDA’s 2.5billion bushel export projection versus last year’s 52.1 million per week average from this point forward.

In the weekly crop progress and conditions report, US national corn harvest advanced to 66% complete versus 65% expected, 52% last week and 53% average.

In the weekly Energy Information Administration report, ethanol production averaged 1,106,000 barrels per day versus 1,096,000 the prior week and 941,000 bpd last year. This was the second largest weekly production on record with the record for weekly ethanol production set in December 2017 at 1,108,000 barrels per day. Ethanol stocks slipped to 19.9 million barrels versus 20.1 the previous week and 19.6 million last year.

Strategy and outlook: Commercials have been accumulating contracts of corn on weakness as values near weekly support. Surging wheat values will support corn.

Soybeans

Soybeans closed the week 24 cents lower. Private exporters announced sales of 199,000 metric tons of soybeans to China, 125,730 to Mexico, 132,000 to an unknown destination and 222,350 received to an unknown destination.

In the weekly export inspections report, U.S. exports were solid at 77.3 million bushel and well below last year’s 2.889 million. Cumulative exports of 299 million bushels are still down 45% versus 543 million bushels a year ago.

Soybean exports will need to average roughly 38.6 million bushels per week from this point forward to reach the USDA’s 2.09 billion bushel export projection compared to last year’s 36 million per week average in 2020-21’s 2.265 billion bushel export projection.

In the weekly crop progress and conditions report, national soybean harvest moved to 73% complete versus 74% expected, 60% last week and 70% average.

Strategy and outlook: Commercials have been accumulating contracts of soybeans on weakness as values near weekly support. This buying will limit the downside risk for the soybean market as harvest progresses.

Wheat

Chicago wheat closed a half cent higher, Kansas City wheat closed 8 cents higher and Minneapolis wheat 22 1/4 cents higher. Egypt bought 180,000 metric tons of Russian wheat, 120,000 tons of Ukrainian wheat and 60,000 tons of Romanian wheat.

In the weekly export inspections report, U.S. exports were minimal again at only 5.2 million bushels, the second week in a row of exports at 5.2 million bushels and were well below last year’s 14.7 million. Cumulative export inspections of 348 million bushels are now down a 12-week high of 14.5% from last year’s 408 million and are the second lowest of the last six years and third lowest of the last 48 years through mid-October. In order to reach the USDA’s 875 million bushel export projection versus last year’s 992 million, wheat export inspections will need to average roughly 15.1 million bushels per week through the end of May versus last year’s 16.7 million per week average from this point forward.

In the weekly crop progress and conditions report, winter wheat plantings advanced to 80% complete versus 81% expected, 70% last week and 80% average. The first national winter wheat condition ratings of the season came in at 64% good or excellent versus 54% expected and 41% last year.

Strategy and outlook: Commercials have been buying as smaller world production and ending stocks figures are bullish for wheat values. Producers are seeding winter wheat but the lack of moisture in the Plains could slow the emergence of the crop.

Live and feeder cattle

Last week, live cattle closed 65 cents higher while feeder cattle closed 2 cents higher.

Active fed cattle cash trade occurred in the North from $126 to mostly $127 live, and $200 dressed – $2 to $3 higher than the previous week. Trade in the South was moderate at primarily $126, which was $2 firmer than last week.

The Fed Cattle Exchange weekly auction had 4,508 head listed for sale and sold 272 head at $124.00.

The latest USDA steer carcass weights were up 1 pound at 922 pounds, which is 6 pounds below a year ago.

Last week’s beef export sales saw a net sales of 19,200 metric tons reported for 2021 with shipments of 16,700 metric 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

Lean hogs closed the week $3.55 lower.

Weekly Iowa and southern Minnesota hog weights for week ending Oct. 23 has weights at 288.2 pounds versus 287.1 pounds last week and 285.9 pounds last year.

This week’s net pork sales of 29,500 metric tons were reported for 2021 with shipments of 32,800 tons.

Strategy and outlook: Hog futures have soared after a bullish hog and pig report, bouncing off weekly chart support as commercials have turned bullish.

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.

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