Early soybean emerging

Corn closed the week 22 1/2 cents lower. Private exporters did not report any export sales.

U.S. corn exports, for the week were 24.3 million bushels (mb), at the bottom end of market expectations and slightly below last week’s 26.7 mb. They were significantly below the roughly 32.3 million bushel per week average weekly export pace needed to reach the USDA’s 2.2 billion bushel export projection.

Corn planting is now 96 percent complete nationwide versus 100 percent last year and 100 percent average. U.S. corn conditions slipped to 56 percent good or excellent versus 59 percent expected, and 77 percent last year as conditions were down sharply in Eastern Belt with Illinois only 47 percent good or excellent, Missouri only 28 percent, Indiana 43 percent good or excellent and Ohio 39 percent good or excellent.

Corn emergence is 89 percent. The USDA sent a bearish surprised to the trade by only lowering intended planted acres to 91.7 million versus estimates of 86.7 million. Farmers may have intended to plant that many acres, but the reality it is weather conditions were not conducive to plant that many acres. The USDA intends to resurvey farmers and release the information Aug. 12. This figure was above last year’s planted acreage of 89.129 million acres. June 1 stocks were supportive at 5.202 billion bushels (bb) versus estimates of 5.346 bb.

Strategy and outlook: With funds now going net long due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies. July corn is closing in on major weekly resistance.

SOYBEANS

Soybeans closed the week 3 cents lower. Private exporters reported a sale of 544,000 metric tons (mts) of beans to China and 145,000 mts to an unknown destination.

Exports last week of 25.1 million bushels were with market expectations of 18.4-28.5 million bushels. Soybeans continue to fall short of the average “needed” pace, now at roughly 29.9 million bushels per week in each of the last 11 weeks.

Planting is 85 percent complete versus 88 percent expected, 100 percent last year and 97 percent average. Eastern Belt remains significantly delayed.

The first U.S. soybean conditions of the year came in at 54 percent good or excellent versus 59 percent expected and 73 percent last year. U.S. soybean conditions are lower than expected and the worst since 2012, the second worst in 25 years for late June. Illinois is only 42 percent good or excellent, Missouri 36 percent good or excellent, Indiana 41 percent good or excellent and Ohio 36 percent good or excellent.

The soybean planted acreage figure was bullish for prices at only 80.04 million acres were intended to be planted versus estimates at 84.355 million acres. This would be the lowest soybean seeding in the U.S. since 2013 if realized. This survey was done as of June 16, when over 20 million acres of soybeans had yet to be seeded. The USDA will resurvey farmers and release the results on August 12. Soybean stocks were estimated at 1.790 bb versus pre-report estimates of 1.861 bb.

Strategy and outlook: With funds covering shorts due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies.

WHEAT

Chicago wheat closed 4 3/4 cents lower, Kansas City wheat closed 3 cents lower and Minneapolis wheat 10 1/4 cents higher. Exporters did not report any sales.

U.S. wheat exports of 14.9 million bushels were within market expectations of 11-18.4 million bushels and were little-changed from the previous week’s 14.1 million bushels, but slightly above last year’s same-week exports of 13.4 million bushels. Wheat exports need to average roughly 16.7 million bushels per week to reach the USDA forecast.

Winter wheat conditions fell to 61 percent good or excellent versus 63 percent expected, 64 percent good or excellent last week and 37 percent last year. Conditions declined more than expected. Winter wheat harvest is only 15 percent complete versus 19 percent expected, 39 percent last year and 34 percent average. Spring wheat conditions are 75 percent good or excellent versus 77 percent expected and 77 percent last year. The June 1 stocks report for wheat came in at 1.072 bb versus estimates of 1.1 billion bushels and 1.099 bb last year.

The All wheat acres came in at 45.609 million, near estimates of 45.654 million and just below the March estimate of 45.764 million. Spring wheat acres were forecast at 12.43 million, down from 12.83 million at the March intentions.

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 $1.52 higher while feeder cattle closed $2.82 higher.

There was trade in the North at $178 to $180 trade, steady to $2 lower compared to the prior week and some $109 trade in the South, steady with week prior.

The Fed Cattle Exchange online auction saw 148 head offered in two lots, both from Kansas. Feedlots asked $109.50 and $110 and both lots went unsold. Net beef sales of 15,100 metric tons (MT) reported for 2019 were down 16 percent from the previous week and 17 percent from the prior four week average.

The latest USDA steer carcass weights were up 3 pounds compared to the prior week at 849, making them 7 pounds less than last year. The monthly cold storage report saw total red meat supplies in freezers were down 2 percent from the previous month and down 6 percent from last year. Total pounds of beef in freezers were down 6 percent from the previous month and down 13 percent from last year. Frozen pork supplies were up 1 percent from the previous month and up 1 percent from last year. Stocks of pork bellies were up 5 percent from last month and up 5 percent from last year.

Strategy and outlook: Producers can transfer all risk to the cash markets. Higher corn prices means cattle will be sold quicker at lighter weights, resulting in less supply in 2020.

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.