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BRIAN HOOPS

By Staff | Jun 19, 2015

Native American suit

A settlement agreement in a lawsuit between USDA and Native American farmers is going back to the courts.

The discrimination lawsuit was settled, but motions have been filed by tribal groups to distribute the remaining $380 million in the settlement fund directly to the claimants.

The Department of Justice, which is representing USDA, is fighting that, saying the agreement can’t be changed without its consent. Oral arguments will be heard June 29 in federal court.

Ag hearing set

The U.S. Senate Agriculture Committee is set to hold a hearing next month on the deadliest-ever outbreak of bird flu in U.S. poultry amid mounting criticism from Iowa lawmakers about the speed of the U.S. Agriculture Department’s response.

Sen. Pat Roberts, R-Kansas, committee chairman, is expected to hear testimony on the USDA’s response and funding for its efforts on July 7, spokeswoman Meghan Cline said.

More than 47 million chickens and turkeys have been killed in the past six months because of bird flu or are set to be culled to prevent the spread of the disease.

Most are hens in Iowa, the nation’s top egg-producing state, and U.S. egg prices are projected to set an annual record high because of the losses.

The USDA is overseeing the killing and disposal of affected birds and the scope of the outbreak “has exposed some flaws in the response plans,” Sens. Charles Grassley, R-Iowa,

and Joni Ernst, R-Iowa, told Roberts in a letter that requested a hearing.

There are concerns about the complexity of a program through which the USDA pays farmers for birds that must be culled, the lawmakers wrote last week.

CORN ANALYSIS

Corn closed the week 7.5 cents lower.

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

Weekly export sales showed corn sales at 18 million bushels. Annual corn sales now have reached 1.696 billion bushels and sales are now down 154 mb compared to a year ago.

The weekly crop progress report showed corn conditions unchanged for the second consecutive week at 74 percent good-to-excellent, 1 percent less than last year.

In the monthly supply/demand report, the USDA increased the carryout for both new crop and old crop corn with old crop ending stocks pegged at 1.87 bb compared to last month’s 1.85 bb.

New crop ending stocks were increased by 25 mb to 1.77 bb. The 2015-2016 current U.S. corn yield per acre prediction is 166.8 bpa with 81.7 million acres projected harvested.

The next major market moving report will be the stocks and acreage report on June 30. The USDA may recognize the slow planting pace of Missouri and Kansas as well as drowned out acres and lowered planted acres in that report. Given the current crop conditions, the USDA yield estimate of 166.8 bpa seems reasonable.

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

Sold 10 percent of 2015 production. Sell 20 percent at $3.93 December, 20 percent at $4.15 and buy December 400 puts on balance of production.

SOYBEANS ANALYSIS

Soybeans closed the week 1.5 cents higher.

Last week, private exporters announced sale of 128,500 metric tons of soybeans to an unknown destination.

Weekly export sales of soybeans were 4.8 mb old crop and only 12.8 mb for new crop sales.

New crop sales are at a five year low. The weekly crop progress report showed soybeans were noted at 79 percent planted with emergence at 64 percent, both figures are near normal, despite Missouri being only 30 percent seeded and Kansas only 31 percent seeded.

The first soybean rating of the season was 69 percent g/e, below last year’s rating of 74 percent.

In the supply/demand report, old crop soybean stocks were lowered to 330 mb versus last month’s 350 mb carryout.

New crop’s carryout was decreased by 25 mb to 475 mb.

The 2015- 2016 current U.S. soybean yield per acre prediction is 46 bpa with 83.7 million acres projected harvested.

The acreage report at the end of the month could be a shocker to the trade. The market has already anticipated larger seeded acres, however if producers planted more acres to corn than previously thought due to a record fast corn planting pace and some acres go unseeded due to wet conditions, prices could find strength after the report’s release.

Seasonal highs are usually formed by June 23.

Strategy and outlook: Producers are sold 100 percent of 2014/15 production. Bought calls on 50 percent of 2014/15 production to re-own previous sales. Sold 10 percent of 2015/16 production. Sell 20 percent at $9.75, 20 percent at $10.35 and buy 1000 November puts on balance of production.

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.

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

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