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BRIAN HOOPS

By Staff | Oct 28, 2011

CORN ANALYSIS

Corn closed the week $.09 1/4 higher. Last week, private exporters did not announce private export sales.

Last week, the USDA reported harvest data of the 2011 U.S. growing season with corn harvest at 47 percent complete.

This is below last year’s pace of 66 percent completed, but ahead of the average of 41 percnet. Key growing states show Iowa 45 percent harvested, Illinois 64 percent harvested, with Indiana at 30 percent, Nebraska at 30 percent and Minnesota at 48 percent.

Strategy and outlook: Producers should have 30 percent of new crop production sold. Producers lifted 660 December puts on 50 percent of the crop and will try to rehedge at a higher level.

$6.02 weekly support has provided an excellent opportunity for producers to re-own previous sales with futures and/or options. Hold those positions for now.

SOYBEANS ANALYSIS

Soybeans closed the week $.57 3/4 lower from last week. Last week, private exporters did not announce any private export sales.

Last week, the USDA reported 2011 U.S. soybean harvest was 69 percent completed versus 81 percent last year and the average pace of 61 percent.

Key states are Iowa, with 87 percent harvested, Nebraska, 84 percent done, Minnesota, 96 percent, Illinois, 73 percent and Indiana 55 percent.

Strategy and outlook: Producers should have 30 percent of the 2011 crop production sold and 50 percent covered with November 1400 puts.

When soybeans fell to major support, producers lifted the puts and will try to rehedge at a higher level.

WHEAT ANALYSIS

For the week, Chicago wheat closed $.09 1/4 higher; Kansas City wheat $.15 1/2 higher and Minneapolis wheat $.26 3/4 higher. Last week, private exporters did not announce any private sales.

Last week’s crop progress report showed 73 percent of the winter wheat crop has been seeded, behind last year’s pace of 80 percent and the average pace of 77 percent. Oklahoma is 63 percent seeded, Texas is 52 percent finished, Kansas 84 percent and Nebraska 95 percent finished.

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 and buy at the money puts.

LIVE CATTLE ANALYSIS

Live cattle ended the week $1.05 lower while feeder cattle ended $1.67 lower. Last week, cash cattle trade was reported in the North at mostly $191, $1 to $2 higher compared to last week while trade in the South was $121; also $1 to $2 higher compared with the previous week.

Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.3 million head on Oct. 1, 2011.

The inventory was 5 percent above Oct. 1. This is the second highest Oct. 1 inventory since the series began in 1996. The inventory included 6.95 million steers and steer calves, up 5 percent from the previous year. This group accounted for 61 percent of the total inventory.

Heifers and heifer calves accounted for 4.32 million head, up 5 percent from 2010. Placements in feedlots during September totaled 2.47 million, slightly above 2010. Net placements were 2.40 million head.

Strategy and outlook: Producers are hedged 50 percent of their third quarter production at $121 against the October contract, producers should move to 50 percent in remaining production months on Monday’s opening.

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 $.45 lower. The average Iowa-Minnesota hog weight for last week was estimated at 270.5 pounds versus 270 pounds the previous week and 270.7 pounds last year.

Total red meat supplies in freezers were up 5 percent from the previous month and up 12 percent from last year.

Total pounds of beef in freezers were down slightly from the previous month, but up 8 percent from last year.

Frozen pork supplies were up 11 percent from the previous month and up 16 percent from last year.

Stocks of pork bellies were down 39 percent from last month, but up 92 percent from last year.

Strategy and outlook: Producers should look to extend hedge coverage to 50 percent in all months of production on Monday’s opening.

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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