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BRIAN HOOPS

By Staff | Nov 4, 2011

CORN ANALYSIS

Corn closed the week $.05 3/4 higher. Last week, private exporters reported a 100,000-metric ton corn sale to an unknown destination.

The USDA reported last week harvest data of the 2011 U.S. growing season with corn harvest at 65 percent complete.

This is below last year’s pace of 81 percent completed, but ahead of the average of 51 percent.

Key growing states show Iowa 71 percent harvested, Illinois 79 percent harvested, with Indiana at 42 percent, Nebraska at 49 percent and Minnesota at 79 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 $.04 3/4 higher from last week. Last week, private exporters did not announce any private export sales.

The USDA reported last week 2011 U.S. soybean harvest was 80 percent completed versus 91 percent last year and the average pace of 71 percent. Key growing states show Iowa 95 percent harvested, Nebraska 93 percent done, Minnesota 100 percent, Illinois 84 percent and Indiana 68 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 $.12 1/2 higher; Kansas City wheat $.15 higher and Minneapolis wheat $.01 1/4 higher.

Last week, private exporters did not announce any private sales, however Egypt purchased 120,000 mts of wheat from Russia.

Last week’s crop progress report showed 82 percent of the winter wheat crop has been seeded, behind last year’s pace of 87 percent and the average pace of 84 percent. Oklahoma is 82 percent seeded, Texas is 63 percent finished, Kansas 92 percent and Nebraska 99 percent finished.

Winter wheat conditions are 47 percent good-to-excellent, the same as last year and the worst in 20 years.

Strategy and outlook: Producers are now 50 percent sold against the 2011 crop. We 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 $3.10 lower, while feeder cattle ended $1.65 lower. Last week, cash cattle trade was reported in the North at mostly $193, $2 higher compared to last week, while trade in the South was $121; steady compared with the previous week.

Imports of Canadian slaughter steers and heifers during the week of Oct. 14 declined 3,241 head with feeder cattle down 1,422 head and cows down 308 from last year.

Year-to-date steer and heifer imports are down 38 percent from last year, with feeder cattle down 64 percent and cows down 28 percent.

Strategy and outlook: Producers are hedged 50 percent of all production month. October at $121; December at $122.05; February at $124.65; April at $128.62; June at $126.65 and August at $126.45. 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 $2.97 lower. The average Iowa-Minnesota hog weight for last week was estimated at 273.3 pounds versus 272.3 pounds the previous week and 275.3 pounds last year.

Strategy and outlook: Producers have extended hedge coverage to 50 percent in all months of production. December is hedged at $89.50; February is hedged at $91.90; April is hedged at $94.55; June is hedged at $100.60; July is hedged at $98.92 and August is hedged at $97.

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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