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BRIAN HOOPS

By Staff | Oct 23, 2015

U.S. ag exports

Through the first 11 months of the last fiscal year, U.S. farm export values were down about 9 percent from the same period last year.

USDA analyst Bryce Cooke said that should not be a surprise, considering the sluggish growth in global trade overall.

Trade growth slowed to 1.6 percent this year, compared with 3.2 percent last year, said Cooke, adding export values are down for most ag commodities.

Predictability comes when?

In a letter to Agriculture Secretary Tom Vilsack, Senate Agriculture Committee Chairman Pat Roberts (R-Kansas) said farmers need predictability.

The Farm Service Agency has yet to process ARC and PLC payments.

According to law, these payments were to begin Oct. 1 or as soon as practicable.

The FSA has yet to announce or process payments to producers.

Specialty crops

USDA has awarded more than $113 million in program grants to support specialty crop research and programs to increase demand.

The Agricultural Marketing Service is awarding $63 million to 755 Specialty Crop Block Grant Program projects nationwide.

The grants are issued to state departments of agriculture.

USDA’s National Institute of Food and Agriculture is also announcing $50 million in grants funded through the Specialty Crop Research Initiative.

CORN ANALYSIS

Corn closed the week 4.75 cents lower.

Last week, private exporters did not report any private sales. Weekly export sales showed corn sales were 22 million bushels for new crop corn.

New crop sales are 427 mb, or down 243 mb, from last year’s pace.

In the weekly crop progress and conditions report, the USDA reported U.S. corn harvest at 42 percent complete, near expectations.

Iowa is only 29 percent harvested, Minnesota 29 percent and Nebraska 26 percent, suggesting the bulk of harvest pressure in the western Corn Belt remains in front of the market.

This should pressure basis levels during the next four to six weeks.

As we suspected, corn looks to have entered into a technical downtrend as the technicals match up with the bearish fundamental picture.

Prices look poised to test weekly support between $3.61 and $3.65 under the weight of the final stages of harvest pressure.

Strategy and outlook: Producers:

  • Are 100 percent sold of the 2014/15 crop.
  • Sold 50 percent of 2015 production and own December puts on balance of production.
  • Should exit puts when December hits $3.65.
  • Sold 20 percent of 2016 crop.

SOYBEANS ANALYSIS

Soybeans closed the week 14.5 cents higher.

Last week, private exporters announced sales of 360,000 metric tons of soybeans to China and 20,000 mt of bean oil to an unknown destination.

Weekly export sales of new crop soybeans were 54.3 mb. The export pace of the 2015/16 marketing year now stands at 860 mb, or down 263 mb from last year’s pace.

The weekly crop progress report saw U.S. soybean harvest came in at 62 percent complete, right in line with expectations.

The monthly NOPA crush report showed the September crush was 126.7 million bushels, below average market expectations of 129.4 million, but was sharply above last year’s 100 mb and was the highest for the month of September since 2007.

This crush figure was down from last month’s 135.3 mb and crush next month should be sharply higher as new crop supplies make their way into crush plants.

Using the USDA current ending stocks estimate of 425 mb, U.S. soybean stocks would be up 123 percent from last year and nearly double the level of any years’ stocks in the U.S. over the last eight years.

This looks to increase in subsequent reports as the USDA will increase yield forecasts.

Strategy and outlook: Producers:

Are 70 percent sold of 2015/16 production.

  • Own November puts on balance of production.
  • Should roll puts to January options.
  • Should sell 20 percent at $9.50.
  • 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.

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