×
×
homepage logo

BRIAN HOOPS

By Staff | Oct 26, 2012

CORN ANALYSIS

Corn closed the week $.08 3/4 higher. Last week, private exporters did not announce any private export sales.

In the weekly export sales report, corn sales shows 6.6 million bushels slated for 2012/13. This is below the 15.7 mb that is needed to stay on pace with the USDA forecasts of 1.15 billion bushels.

The weekly crop progress and condition report showed the U.S. corn harvest is 79 percent done nationally, up 10 percent from last week and ahead of the average of 38 percent. Normally, 50 percent is the threshold used to determine harvest lows. Iowa is 87 percent done with Nebraska at 80 percent, Minnesota at 90 percent, Illinois at 87 percent and Indiana at 61 percent.

Informa has planted corn acres pegged at 97.5 million for next year with production at a record 14.6 billion bushels, in line with its previous estimate.

Strategy and outlook: Producers are now 80 percent sold of 2012/13 crop and producers own the December 740 strike puts on 25 percent of production.

Exit puts at market. Producers are also 40 percent sold of the 2013/14 crop.

SOYBEANS ANALYSIS

Soybeans closed the week $.11 3/4 higher from last week. Last week private exporters reported a sale of 110,150 metric tons of U.S. soybeans to an unknown destination.

In the weekly export sales report, soybean sales were 19.2 mb, this is above the 8.2 mb that is needed to stay on pace with the current USDA forecast of 1.265 bb.

So far in the marketing year, the U.S. is 82 percent sold of the USDA projections.

The weekly crop progress/conditions report showed U.S. soybean harvest is 71 percent done nationally, up 13 percent from last week and ahead of the average of 58 percent.

Now that harvest has advanced past the 50 percent mark, traders will be looking for harvest lows to form as traditionally the 50 percent threshold indicates when harvest lows form. Iowa is 93 percent done with Nebraska at 86 percent, Minnesota at 99 percent, Illinois at 69 percent and Indiana at 51 percent.

NOPA crush data showed soybeans crushed at 119.7 mb, up 8.5 percent from last year, but down 4 percent from August.

Soy oil produced rose 8.5 percent, accordingly, but stocks increased just 5.7 percent.

Soymeal exports were up 26.4 percent from last year.

Informa increased its soybean acreage estimate for next year by 115,000 acres from its last estimate to 80 million acres. Production would be a record 3.5 billion bushels.

Strategy and outlook: Producers are 80 percent sold of the 2012/13 production and producers own the November 1600 put options on 25 percent of the 2012/13 production.

Exit put options. Producers are now 40 percent sold of 2013/14.

LIVE CATTLE ANALYSIS

Live cattle ended the week $1.77 higher, while feeder cattle ended $4.15 higher. Last week, cash trade developed in the South at $127, $2 higher compared with a week ago.

In Nebraska, trade developed at $197 to $198, $3 to $4 higher, compared with last week.

USDA reported cattle and calves on feed for U.S. slaughter markets, in feedlots with capacity of 1,000 or more head, totaled 11 million on Oct. 1. The inventory was 3 percent below Oct. 1, 2011. Placements in feedlots during September totaled 2 million, 19 percent below 2011. This is the lowest cattle placements for the month of September since the series began in 1996.

Marketings of fed cattle during September totaled 1.6 million, 12 percent below 2011. This is the second lowest cattle marketings for the month of September since the series began in 1996.

Strategy and outlook: Producers currently have no hedges in place.

LEAN HOGS ANALYSIS

Lean hogs closed the week $1.25 higher. The average Iowa-Minnesota hog weight for last week was estimated at 272.2 pounds versus 271.3 pounds the previous week and 272.3 pounds last year.

According to a story by Bloomberg News, U.S. hog farmers are slaughtering animals at the fastest pace since 2009 as a surge in feed costs spurred the biggest losses in 14 years.

This is expected to lead to smaller herds next year and a rebound in pork prices. The 73.3 million hogs processed in eight months through August were the most in three years, USDA data show.

Pork supply will drop to the lowest per capita since 1975 next year, the USDA estimates. Cash hog markets are rallying with the cash product gaining 21 percent in the last three weeks.

Cutout values have also climbed back to the highest levels since late August.

Strategy and outlook: Producers have sold 50 percent of February at $85.85. Sell 50 percent of December at $84.75; 50 percent of April at $91.50.

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.

Please Enter Your Facebook App ID. Required for FB Comments. Click here for FB Comments Settings page