Corn closed the week $.31 1/2 higher. Last week, private exporters reported a 365,760 metric tons of corn sale to an unknown destination. 243,840 MT is for delivery during the 2011/12 marketing year and 121,920 MT is for deliver during the 2012/13 marketing year.
Last week, the USDA reported 2011 U.S. corn good to excellent ratings were 57%, down 3% from last week. Last year, 70% of the crop was rated g/e. Iowa is rated 63% g/e, Illinois 42% g/e, Indiana 38% g/e, Minnesota 70% g/e and Nebraska 76% g/e.
Weekly export sales report showed net sales of 383,800 MT for the 2010/11 marketing year were up 58 percent from the previous week and 17 percent from the prior 4-week average. Net sales of 152,300 MT for delivery in 2011/2012.
Strategy and outlook
Producers are now sold/hedged on 100% of the 2010 crop and should have 30% of new crop production sold.
Producers were advised to buy downside protection with put options prior to the June acreage report. Popular options were the $6.40 December puts. Exit until the next hedging opportunity comes along.
Soybeans closed the week $.55 higher from last week. Last week, private exporters reported no private export sales. In its last report ever, the Census Crush Bureau forecast July soybean crush at 129.6 million bushels, above estimates and on par with a year ago. Oil stocks totaled 3,065 mb, down 64 mb from last month and down 484 mb from last year.
Last week, the USDA reported 2011 U.S. soybean good to excellent ratings were 59%, down 3% from last week. Last year, 64% of the crop was rated g/e. Iowa is rated 63% g/e, Illinois 53% g/e, Indiana 45% g/e, Minnesota 68% g/e and Nebraska 79% g/e.
Weekly export sales report showed net sales of 107,500 MT for the 2010/11 marketing year were down 52 percent
from the previous week, but up noticeably from the prior 4-week average. Net sales of 550,100 MT for delivery in 2011/2012.
Producers have sold/hedged 100% of the 2010 crop. Producers should have 30% of new crop production sold.
No new crop sales are advised at this time, until more is known about the crop.
LIVE CATTLE ANALYSIS
Live cattle ended the week $.30 lower while feeder cattle ended $1.20 lower. Last week, cash cattle trade was reported in the North at $180, $3 lower compared to last week while trade in the South was $113.00, $1 lower compared with the previous week. All cattle and calves in the United States and Canada combined totaled 113.9 million head on July 1, 2011, down 1 percent from the 115.1 million on July 1, 2010. All cows and heifers that have calved, at 45.8 million head, were down 1 percent from a year ago. All cattle and calves in the
United States as of July 1, 2011, totaled 100.0 million head, 1 percent below the 101.1 million on July 1, 2010.
All cows and heifers that have calved, at 40.6 million head, were down 1 percent from a year ago.
Producers are hedged 50% of their 3rd quarter production at $121.00 against the October contract, near the old weekly highs. Feed costs should be covered in corn futures/options or cash product through the 2011 growing season.
LEAN HOGS ANALYSIS
Lean hogs closed the week $1.27 lower.
The average Iowa-Minnesota hog weight for last week was estimated at 262.5 lbs versus 261.0 lbs previous week and 266.6 lbs last year.
The monthly cold storage report showed Total red meat supplies in freezers were down 6 percent from the previous month but up 11 percent from last year. Total pounds of beef in freezers were down 3 percent from the previous month but up 8 percent from last year. Frozen pork supplies were down 8 percent from the previous month but up 16 percent from last year. Stocks of pork bellies were down 39 percent from last month but up 38 percent from last year.
Producers should look to extend hedge coverage to 50% at $96.50.
All feed costs should be locked in as well.
Brian Hoops is president and senior market analyst of Midwest Marketing Soluctions Inc. Midwest Marketing Solutions is a full-service commodity brokerage and marketing advisory service, clearing through R. J. O’Brien.