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BRIAN HOOPS

By Staff | Sep 9, 2011

CORN ANALYSIS

Corn closed the week $.07 1/2 higher. Last week, private exporters reported no private sales.

Last week, the USDA reported 2011 U.S. corn good-to-excellent ratings were 54 percent, down 3 percent from last week.

Last year, 70 percent of the crop was rated g/e. Iowa is rated 59 percent g/e, while Illinois is at 41 percent, Indiana 37 percent, Minnesota 64 percent and Nebraska 77 percent.

Weekly export sales report showed net sales reductions of 320,900 metric tons resulted for the 2010/11 marketing year. Net sales of 957,900 MT was for delivery in 2011/2012.

Exports of 765,800 MT were down 7 percent from the previous week and 11 percent from the prior four-week average.

Strategy and outlook: Producers are now sold/hedged on 100 percent of the 2010 crop and should have 30 percent of new crop production sold.

Advance sales of the 2011 crop by another 10 percent should March corn reach $8.

SOYBEANS ANALYSIS

Soybeans closed the week $.31 higher from last week. Last week, private exporters reported no private export sales.

Last week, the USDA reported 2011 U.S. soybean g/e ratings were 57 percent, down 2 percent from last week.

Last year, 64 percent of the U.S. crop was rated g/e. Iowa is currently rated at 64 percent, Illinois 48 percent, Indiana 45 percent, Minnesota 63 percent and Nebraska 72 percent.

Weekly export sales report showed there were no new sales reported during the week for the 2010/11 marketing year. Net sales of 593,800 MT for delivery in 2011/2012.

Exports of 235,600 MT were down 17 percent from the previous week, but up 15 percent from the prior four-week average.

Strategy and outlook: Producers have sold/hedged 100 percent of the 2010 crop. Producers should have 30 percent of the 2011 crop production sold.

Producers should advance sales of the 2011 crop by another 10 percent if March futures trade to $15.

WHEAT ANALYSIS

For the week, Chicago wheat closed $.13 1/4 higher; Kansas City wheat $.14 higher and Minneapolis wheat $.13 1/2 lower. Last week, private exporters reported sales of 102,500 MT of U.S. HRW to an unknown destination.

Last week’s U.S. crop progress report showed that 97 percent of the winter wheat crop has now been harvested, slightly behind the average of 99 percent. The USDA also reported 50 percent of the spring wheat crop has been harvested, behind the average pace of 71 percent and also behind last year’s pace of 66 percent harvested.

Weekly export sales report showed net sales of 369,200 MT for the 2011/12 marketing year, up six percent from the previous week and down 17 percent from the prior four-week average.

Strategy and outlook:Producers are now 50 percent sold against the 2011 crop. We would advise another 20 percent sale for the 2011 crop at $9.55 against the Kansas City contract against the weekly resistance.

LIVE CATTLE ANALYSIS

Live cattle ended the week $.70 lower, while feeder cattle ended $.35 higher.

Last week, cash cattle trade was reported in the North at $180, steady compared to last week, while trade in the South was $113, also steady compared with the previous week.

Weekly beef export sales of 16,900 MT for delivery in 2011 were primarily for Japan (4,600 MT), Mexico (3,500 MT), Vietnam (2,200 MT), South Korea (1,700 MT) and Canada (1,300 MT).

Exports of 16,000 MT were mainly to Mexico (3,400 MT), Japan (2,600 MT)Canada (2,100 MT), South Korea (2,100 MT) and Vietnam (1,800 MT).

Strategy and outlook:Producers are hedged 50 percent of their third quarter production at $121 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 $1.30 lower on a combination of softer cash trade and falling product values.

The average Iowa-Minnesota hog weight for last week was estimated at 263.5 pounds versus 262.5 pounds previous week and 265.6 pounds last year.

Strategy and outlook:Producers should look to extend hedge coverage to 50 percent at $96.50.

All feed costs should be locked in as well.

Brian Hoops is president and senior market analyst of Midwest Market Solutions Inc. Midwest Market Solutions is a full-service commodity brokerage and marketing advisory service, clearing through R.J. O’Brien.

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