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BRIAN HOOPS

By Staff | Apr 23, 2015

Summer gas

The Energy Information Administration expects gas prices to be 32 percent lower than a year ago during the peak summer driving period.

EIA said gas prices should average $2.45 a gallon nationwide between April and September, the lowest since 2009.

Rustler sentenced

A 27-year-old Highmore, South Dakota man has been sentenced to seven years in prison in connection with cattle theft.

Kyle Alan Hall was working on a Hyde County ranch in South Dakota at the time of the thefts.

Hall sold his employer’s livestock as his own on the internet and at an area sales barn.

Investigators were able to recover 27 head of the stolen cattle. Three years of Hall’s sentence

were suspended.

Debt offering

Monsanto has announced an $800 million debt offering. A total of $300 million in senior notes that mature in 10 years will have an interest rate of 2.8 percent.

Another $500 million in senior notes that will mature in 2045 will bear an interest rate of 3.9 percent.

CORN ANALYSIS

Corn closed the week 2.25 cents higher.

Last week, private exporters reported sale of 108,000 metric tons of sorghum to an unknown destination.

Weekly export sales showed corn sales at 23 million bushels. Annual corn sales now have reached 1.516 billion bushels, 8 percent below a year ago.

The weekly crop progress report from the USDA showed the corn crop only 2 percent planted nationwide, compared to 3 percent planted last year, and 5 percent on average.

The trade was looking for 4 percent to 5 percent to be seeded.

As per the normal pattern for commercials, the month of April has seen commercial and seasonal traders buying weakness for a potential summer weather rally.

This is because of the uncertainty the upcoming growing season will have as end users are nervous about weather, especially after learning U.S. farmers will plant less corn this year compared to last year.

Southern U.S. producers have been slow to seed due to excessive wet conditions. Midwest U.S. producers will begin seeding corn acres this week weather permitting and weather will become important to pricing by May.

Weekly charts show $4.08 as a chart breakout point.

Strategy and outlook: Producers are 100 percent sold of the 2014/15 crop, and re-owned 50 percent with July options. They sold 10 percent of 2015 production.

They should consider selling another 15 percent at $4.65 December. They bought calls to re-own 50 percent of previous sales.

SOYBEANS ANALYSIS

Soybeans closed the week 15.5 cents higher.

Last week, private exporters did not report any private sales.

Weekly export sales of soybeans were 11 mb. Annual sales are still record large at 1.786 bb, up 9 percent from a year ago, but clearly slowing.

The monthly NOPA crush report was not only bullish, but it literally shattered trader’s expectations. The NOPA March crush was estimated at 162.8 mb, a new all-time record, besting last year’s record 153.8 mb.

Trade estimate was for 155.3 mb, so actual crush was 7.5 mb larger than the average trade estimate. The increase from February to March was the largest month-to-month increase

since 2006.

The strong crush figure indicates better than expected demand.

With the strong crush figure, the market will need to pry soybeans from producers. Look for basis to improve, while producers are seeding this year’s corn and soybean crops.

Seasonally, this has produced a rally in the futures market as well. The market is testing weekly support, which should hold and a rally is likely to unfold into the summer, providing

a marketing opportunity for producers.

Strategy and outlook: Producers are sold 100 percent of 2014/15 production. They bought calls on 50 percent of 2014/15 production to re-own previous sales.

They sold 10 percent of 2015/16 production. They should consider selling another 15 percent at $10.95 November.

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

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

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