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BRIAN HOOPS

By Staff | Sep 5, 2014

USDA and businesses

The U.S. Department of Agriculture is investing $25 million to help 247 businesses nationwide expand their operations and create new products.

The funding is provided through USDA-Rural Development’s Value- Added Producer Grant program, which is part of the Know Your Farmer, Know Your Food initiative.

Seven grants are approved for Minnesota businesses, totaling $994,000, and include two wineries.

Three South Dakota businesses received grants totaling over $274,000. Morning Joy Farm in Mercer is the only North Dakota business to receive a grant, for $62,000.

Suit filed

The American Farm Bureau Federation and National Pork Producers Council have gone to court seeking to prevent the Environmental Protection Agency from disclosing private information about farmers and ranchers. The case was filed in U.S. District Court in Minneapolis.

Last year, three environmental groups filed requests under the Freedom of Information Act. As a result, personal information, including home addresses, GPS coordinates, telephone numbers and e-mail addresses, was released about farm families in 29 states.

The activist group, Food & Water Watch, was listed as an intervener in this case.

CORN ANALYSIS

Corn closed the week 6.25 cents lower. Last week, private exporters announced sales of 120,000 metric tons of corn to Columbia and 113,673 mt of corn to Costa Rica.

Weekly export sales of corn showed corn sales of 26.1 million bushels.

In the weekly crop progress report, the USDA revealed an increase in the corn good-to-excellent rating by 1 percent from the prior week to 73 percent.

Eighty-three percent of the crop has hit dough stage and 35 percent is dented.

The USDA will provide traders with the next glimpse of market information on Sept. 11 with the monthly supply/demand data.

The trade will be looking for the USDA to slightly increase its production figure due to good early harvest data.

The USDA should be conservative with its estimate as it will most likely wait until more yield data is available prior to making a major adjustment to its crop estimates.

From the demand side, look for USDA to leave ethanol and feed usage unchanged, while slightly increasing exports.

This will create slightly larger ending stocks for corn, which are already burdensome. Corn prices should slide lower into harvest, barring a surprise announcement from the USDA.

Harvest data will determine the long term direction for the corn market. If actual yield results come in larger than trade estimates, look for prices to easily test the next major support of $3.25.

Basis at harvest should be extremely wide with nowhere for the product to go, but on the ground in makeshift storage facilities.

Strategy and outlook: Producers are 25 percent sold of the 2014/15 crop and own December puts on 75 percent of the crop.

They should exit puts at $3.25.

SOYBEANS ANALYSIS

Soybeans closed the week 19 cents lower.

Last week, private exporters announced a sale of 123,000 mt of soybeans to an unknown destination for the 2014/15 marketing year.

Weekly export sales of soybeans showed sales of 45.1 mb.

In the weekly crop progress report, USDA revealed that 70 percent of the soybean crop in the g/e category with 90 percent of the crop setting pods compared to 83 percent the prior

week.

The weekly rating is the best since 1995 for this time of year. As reports of very high yields hits the market, soybean values are starting to slide lower, testing weekly support at $10.22.

If this support is broken, the next major weekly support is $8.75. The USDA will provide traders with the next glimpse of market information on Sept. 11 with the monthly supply/demand data.

The trade will be looking for USDA to slightly increase its production figure due to the reports of high yields. The USDA should be conservative with its estimate as it will most likely wait until more yield data comes in prior to making a major adjustment to their crop estimates.

From the demand side, look for USDA to leave crush mill usage unchanged,while slightly increasing exports.

Strategy and outlook: Producers are 25 percent sold of 2014/15 production. Producers own puts on 75 percent of the crop. They should exit puts at $8.75.

This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department. The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.

Brian Hoops can be reached at (605) 660-1155.

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