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BRIAN HOOPS

By Staff | Nov 11, 2011

CORN ANALYSIS

Corn closed the week $.00 3/4 higher. Last week, private exporters did not report any private sales.

Last week, the USDA reported harvest data of the 2011 U.S. growing season with corn harvest at 78 percent complete.

This is below last year’s pace of 90 percent completed, but ahead of the average of 62 percent. Key growing states show Iowa 87 percent harvested, Illinois 89 percent harvested, with Indiana at 57 percent, Nebraska at 73 percent and Minnesota at 93 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.

The $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 higher 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 87 percent completed versus 95 percent last year and the average pace of 79 percent. Key growing states show Iowa 98 percent harvested, Nebraska 98 percent done, Minnesota 100 percent, Illinois 94 percent and Indiana 81 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 $.07 3/4 higher; Kansas City wheat $.20 lower and Minneapolis wheat $.02 3/4 higher. Last week, private exporters did not announce any private sales, however Egypt purchased 180,000 metric tons of wheat from Russia and the Ukraine.

Last week’s crop progress report showed 89 percent of the winter wheat crop has been seeded, behind last year’s pace of 92 percent and the average pace of 88 percent. Oklahoma is 90 percent seeded, Texas is 74 percent finished, Kansas 96 percent and Nebraska 100 percent finished. Winter wheat conditions declined by 1 percent from last week to 46 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 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 $5.45 higher while feeder cattle ended $6.30 higher. 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 $119, $2 lower compared with the previous week.

Futures received further support from reports earlier this week out of Japan that the Asian nation is looking to easing restrictions on beef imports from he U.S. and Canada. The Nikkei reported Japan’s Health Ministry could allow imports of beef from cattle up to 30 months old.

Current rules, which were put n place in response to concerns over mad cow disease, only allow the importation of cattle up to 20 months old.

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 $.17 higher. 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. 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. He can be contacted at 605-660-1155.

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