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BRIAN HOOPS

By Staff | Oct 28, 2016

2015 vs 2016 losses

The USDA’s Risk Management Agency said 2016 crop insurance indemnities stand at more than $1.2 billion.

At this time last year, indemnities for 2015 crops stood at more than $2.5 billion. Payouts for wheat lead all crops with indemnities of $361 million, followed by corn at $273 million, soybeans at $96 million and cotton at $91 million. The loss ratio for 2016 crops is .13, compared to .26 at this point for 2015 crops.

Ag mysteries

The North Dakota Stockmen’s Association and the Sioux County Sheriff’s Department are investigating two disturbing cases near Cannon Ball, North Dakota. One case involves a dead saddle horse, four dead cows and more than 30 head of missing cattle.

The other case involves three dead bison. In both cases, animals appear to have been butchered. The reports of missing and butchered livestock are coming from ranches that are near the Dakota Access Pipeline protests.

The North Dakota Stockmen’s Association is asking livestock producers to monitor their herds and report any suspicious activity.

New price limits

Effective Monday, for trading starting on Tuesday, the Board of Trade of the City of Chicago, Inc. will reset price limits for grain and oilseed futures.

This is the second and last of the two price limit resets in 2016. Beans go from 65 cents to 70 cents; Chicago and KC wheat go from 35 cents to 30 cents. Corn is unchanged at 25 cents.

For Soybean oil and Soybean Meal, daily limit will remain unchanged at $0.025/pound and $20 per tonne respectively.

The new futures price limits effective on Tuesday will remain in effect until the first trading day in May 2017.

Suspended trading

China, the world’s second-largest corn consumer, suspended its weekly state corn sales to encourage companies to buy grain from the crop currently being harvested, according to the National Grain Trade Center. Auctions were suspended starting from this week and will resume sometime after May when sales of new-crop corn are set to end, the online trading platform for state stockpiles said in a statement.

China ended its state stockpiling program this year and moved to more a market-based system after its acquisition of grain at above-market prices led to a glut of corn. The government has more than 200 million metric tons of corn in its reserves after selling about 42 million tons and holds more than the country’s annual consumption, the China National Grain and Oils Information Center said on its official WeChat account.

Stored meat

Total red meat supplies in freezers were up 7 percent from the previous month and up slightly from last year. Total red meat supplies were a record high for the month of September, since the data was first recorded in 1946. Total pounds of beef in freezers were up 9 percent from the previous month and up 4 percent from last year.

Total pounds of beef were a record high for the month of September, since the data was first recorded in 1932. Frozen pork supplies were up 5 percent from the previous month, but down 2 percent from last year.

Stocks of pork bellies were down 22 percent from last month but up 130 percent from last year.

CORN ANALYSIS

Corn closed the week 1.25 cents lower.

Last week, private exporters reported sale of 161,544 metric tons of corn to an unknown destination.

In the weekly export sales report, sales of corn showed a total of 40.3 mb (1.023 million mt) with all for the 2016-2017 marketing year. This was above the 29.3 mb (743,300 mt) needed this week to be on pace with USDA’s October demand projection of 2.225 bb.

NASS reported the U.S. corn harvest advanced to 46 percent completed versus 49 percent expected from 35 percent last week and just below the 49 percent average.

U.S. corn crop conditions improved 1 percent to 74 percent good-to-excellent versus 73 percent last week and 68 percent last year.

Informa forecast 2017 corn seedings to fall to 91 million acres from 94.5 million seeded in 2016. Using trendline yields, this could reduce the size of the 2017 crop by 600 mb and leave little room for error during the next growing season.

Strategy and outlook: Use rallies to sell inventory.

SOYBEANS ANALYSIS

Soybeans closed the week 21.25 cents higher.

Last week, private exporters reported sales of 706,500 mt to China; and 377,000 mt of soybeans to an unknown destination.

In the weekly export sales report, sales of soybeans showed a total of 73.8 mb (2.0 mmt) with nearly all for the 2016-2017 marketing year. This was well above the 19.8 mb (538,800 mt) needed this week to be on pace with USDA’s October demand projection of 2.02 bb.

Last week, U.S. soybeans harvest advanced to 62 percent complete, in line with estimates and up from 44 percent last week and close to the average pace of 63 percent. U.S. soybean crop conditions were unchanged at 74 percent good-to-excellent and well above last year’s 64 percent rating.

In the NOPA Crush report was bullish as the actual crush came in at 129.4 mb, above the average trade guess of 127.7 mb and the highest total in the last nine years.

It was down from the 131.8 mb in August but above last year’s 126.7 mb in 2015.

Oil stocks came in less than expected at 1.376 billion pounds, the trade was looking for 1.5 billion pounds.

This was well below the 1.62 billion pounds in August and 1.35 billion pounds in September of 2015.

Informa forecast a substantial jump in 2017 seeded acres at 88.5 million compared to 83.7 million seeded in 2016.

Strategy and outlook: Use rallies to sell inventory.

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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