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BRIAN HOOPS

Midwest Market Solutions

September 14, 2018
Farm News

MGEX makes history in

August

MGEX welcomes August 2018 into the fourth position on the Total Monthly Exchange Volume record list with 275,743 contracts. Additionally, August 2018 placed sixth on the all-time Monthly Electronic Volume record list with 241,856 contracts. This past month was the second best August in MGEX history, and the fourth consecutive August to be in the current top-10 for Monthly Exchange Volume and Monthly Electronic Volume.

Profitable secod quarter for Titan Machinery

Titan Machinery is reporting second quarter profits of $300 million, an increase of 11 percent over last year. Equipment sales for the quarter are at $193 million; parts sales are at $60 million and service department revenue is reported at $31.3 million.

U.S. Wheat Associates closes Moscow office

(Reuters) -U.S. Wheat Associates, a trade group that promotes U.S. exports, is closing its office in Moscow after 26 years, it said in a statement, reflecting the emergence of Russia as a major wheat exporter. Russian wheat production has soared in the past few years. As a result, the country became the world's largest wheat exporter in the 2017/18 marketing season, which ended on June 30, increasing supplies to markets traditionally dominated by the United States. "With much more public information available about Russia's wheat supply, we believe it is time to end our mission there and continue allocating more resources in markets where our export volume is growing," USW Vice President of Overseas Operations Mark Fowler said in a statement.

Corn analysis

Corn closed the week $.01 1/2 higher. Last week, private exporters a sale of 101,736 mts to Mexico.

USDA reported 1.2 mb (30,100 mt) of weekly corn export sales for 2017-18 and 40.7 mb (1,032,900 mt) for 2018-19 as of August 30. In 2017-18, most of the outstanding sales of 132.4 mb will be moved to the new season next week.

In the weekly crop progress and conditions report, U.S. corn crop conditions 67 percent good/excellent versus 68 percent expected, 68 percent last week and 61 percent last year.

Corn is 75 percent dented nationwide versus the average of 60 percent.

In the weekly EIA report, ethanol production averaged 1,087k bpd versus 1,070k last week. Crude oil stocks -4.3 mil versus -2.9 expected, gasoline +1.8 mil versus -1.5 expected, distillates +3.1 mil versus +0.7 expected.

The USDA will provide traders with the next glimpse of market information on September 12 with the monthly supply/demand data. The trade will be looking for the USDA to slightly increase their production figure as big crops tend to get bigger.

The USDA should be conservative with their estimate as they will most likely wait until more yield data comes in prior to making a major adjustment to their crop estimates. From the demand side, look for the USDA to slightly increase ethanol and feed usage as well as exports. This will create nearly unchanged ending stocks. Corn prices should slide lower during the early stages of harvest.

Strategy and outlook

Plan on storing as much crop as possible this fall and look for higher prices next summer.

Soybeans analysis

Soybeans closed the week $.00 1/2 lower. Last week, private exporters did not announce any sales.

USDA reported slight (600 mt) weekly soybean export sales for 2017-18 and 24.7 mb (672,600 mt) for 2018-19.

In 2017-18, most of the outstanding sales of 97.7 mb will be moved to the new season next week. In the weekly crop progress and conditions report, U.S. soybean crop conditions 66 percent good/excellent versus 66 percent expected, 66 percent last week, 61 percent last year. 16 percent of the soybean crop is dropping leaves, versus the average of 9 percent.

The USDA will provide traders with the next glimpse of market information on September 12 with the monthly supply/demand data. The trade will be looking for the USDA to slightly increase their production figure due to ideas that August weather was beneficial to yields.

The USDA should be conservative with their estimate as they will most likely wait until yield data comes in prior to making a major adjustment to their crop estimates. From the demand side, look for the USDA to leave crush mill usage as well as exports near unchanged. This will create nearly unchanged ending stocks for soybeans. Soybean prices could dip on some harvest pressure but look for only minimal selling at harvest as basis levels will be horrible.

Strategy and outlook

Plan on storing as much crop as possible this fall and look for higher prices next summer.

This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution's Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.

Brian Hoops can be reached at (605) 660-1155.

 
 

 

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