×
×
homepage logo

BRIAN HOOPS

By Staff | Sep 4, 2015

Deere & Co.

Deere and Co. reports third quarter net income of $512 million, down 40 percent from a year ago.

For the first nine months, net income was off 37 percent to $1.6 billion.

Global sales declined 20 percent and are down 18 percent in the first nine months.

Equipment sales fell 22 percent in the third quarter.

Deere chairman and chief executive officer Sam Allen said John Deere’s third quarter reflects the continuing impact of the downturn in the farm economy as well as lower demand for construction equipment.

Monsanto walking away

U.S.-based Monsanto Co. said it is walking away from efforts to acquire Swiss rival Syngenta AG , which has rejected a recently sweetened offer.

Monsanto said it still believes in the value of a combination of the two agricultural seed and chemical giants, but will focus on building its core business and meeting long-term growth objectives.

Monsanto confirmed that it made a revised offer to Syngenta on Aug. 18, raising a previous offer to CHF 470, a value of roughly $47 billion.

It also confirmed it raised a reverse break-up fee offer to $3 billion.

But, Monsanto said in a statement, Syngenta continued to spurn the overtures.

“Without a basis for constructive engagement from Syngenta, Monsanto will continue to focus on its growth opportunities built on its existing core business,” the company said in a statement.

There was no immediate comment from Syngenta.

Monsanto has said that it wanted to acquire Syngenta primarily to boost its agrichemicals portfolio, which now relies mainly on glyphosate-based herbicides branded as Roundup.

Barring PAMC

National Futures Association has permanently barred Primary Assets Management Corporation, an NFA Member commodity trading advisor and commodity pool operator, and Accredited Investment Management Corp, a former NFA Member introducing broker, from membership.

Peter G. Catranis, the firms’ principal, was also ordered to withdraw from NFA membership and not to register as an associated person or act as a principal of an NFA member.

CORN ANALYSIS

Corn closed the week 2.75 cents lower.

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

Weekly export sales showed corn sales were 33.6 mb for new crop corn, a marketing year high.

New crop sales are 40 percent behind last year’s sales pace.

In the weekly crop progress and conditions report, USDA reported 85 percent of the corn in the dough stage versus 71 percent last week.

Corn dented totaled 39 percent versus the five-year average of 43 percent.

The good-to-excellent category ratings unchanged from last week at 69 percent versus 73 percent g/e last year.

Minnesota’s crop is rated 88 percent g/e, while the crop in Illinois is rated 56 percent g/e, Iowa is rated 82 percent, Nebraska 77 percent and Indiana is 47 percent.

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 comes in prior to making a major adjustment to crop estimates.

From the demand side, look for the USDA to leave ethanol and feed usage unchanged, while slightly decreasing 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 prices begin to firm, watch the downtrend lines on the daily charts for a technical breakout as that will be a buy point for the fund traders.

Strategy and outlook: Producers are:

  • 100 sold of the 2014/15 crop.
  • Sold 50 percent of 2015 production and own December puts on balance of production.
  • Sold 20 percent of 2016 crop.

SOYBEANS ANALYSIS

Soybeans closed the week 4.25 cents lower.

Last week, private exporters announced sales totaling 460,000 metric tons of soybeans to an unknown destination.

Weekly export sales of new crop soybeans were 53.6 million bushels, a marketing year high.

New crop sales are at 437.9 mb, about 360 mb below the pace of last year.

The weekly crop progress report showed 96 percent of the soybeans in the blooming stage compared to the five-year average of 98 percent.

Soybeans setting pods is 87 percent which is near the five-year average of 88 percent.

The condition of the crop was left unchanged from last week at 63 percent g/e versus 70 percent last year.

Iowa is rated 77 percent g/e, Minnesota 80 percent, Nebraska 74 percent, while Illinois is 52 percent and Indiana is 47 percent.

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 excellent growing conditions during the month of August.

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

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

This will create slightly larger ending stocks for soybeans.

Soybean prices could dip ahead of the report. Barring a major surprise, look for rallies to be sold by traders.

Strategy and outlook: Producers are

  • Sold 100 percent of 2014/15 production.
  • Sold 50 percent of 2015/16 production and own November puts on balance of production.
  • Sold 20 percent of 2016 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.

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

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