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BRIAN HOOPS

By Staff | May 26, 2017

Koreans officials are optimistic about opening more trade with the U.S., particularly in the beef sector. That’s according to Cattlemen’s Beef Board chair Brett Morris, who traveled across Japan and South Korea this past week to talk about exports.

We talked to officials at the emabassy. They noted there could be future negotiations to go into North Korea. This was just his perspective, a wait-and-see thing. Morris sways the bilateral agreement between the U.S. and Japan hasn’t come up in the group’s conversations. When it comes to the U.S. opening up trade access with China, Morris notes there will be more hurdles to jump to get into the country.

Corn analysis

Corn closed this week 1 cent higher. Last week, private exporters did not report any private sales.

Weekly export sales of corn showed a total of 34.4 mb (873,300 mt) with 27.8 mb (705,300) sold for the 2016-2017 marketing year. This was above the 10.2 mb (258,100 mt) needed this week to be on pace with USDA’s May demand projection of 2.225 bb.

In the weekly crop progress report, the USDA put U.S. corn planting at 71 percent completed versus expectations of 68 percent and five year average at 73 percent.

U.S. corn emerged is at 31 percent versus five year avereage of 36 percent.

State breakdown shows Missouris is 87 percent, Kansas 60 percent, Illinois 75 percent, Indiana 56 percent, Nebraska 78 percent, Iowa 85 percent, South Dakota 77 percent and Minnesota 84 percent.

In the weekly EIA report, U.S. ethanol production surged higher to 1.027 million barrels/day (302 million gallons/week) from 1.006 mbpd (296 million gallons/week) last week and was the highest production in seven weeks.

Additionally, this week’s production was up nearly four percent from the 988k bpd average seen during foru week period in April.

U.S. ethanol stocks rose sharply last week to 983 million gallons (23.414 million barrels) from 968 million gallons (23.055 million barrels) and they were highest in six weeks, the second of all time, and the largest year-over-year gain at 11 percent in 59 weeks going back to March 2016. The 2017 gworing season is off to a less than ideal start. The best time for a rally is in the next six weeks.

Strategy and outlook: Commercials are bullish and producers should have re-owned previous sales ahead of the growing season. Look to make old and new crop sales on rallies during the next six weeks.

Soybean analysis

Soybeans closed the week 10 1/4 cents lower. Last week, private exporters reported a sale of 132,000 muts of soybeans to an unknown destination.

Weekly export sales of soybeans showed a total of 14.6 mb (396,800 mt) with 13.1 mb (355,300 mt) for the 2016-2017 marketing year. This raised total sales to 2.107bb, three percent above USDA’s May demand projection of 2.050 bb.

The weekly crop progess report placed U.S. soybean seedings are 31 percent done versus 28 percent expected and five year average of 32 percent with emergence at 8 percent versus five years at 9 percent. The April NOPA crush report was a disapointment to the trade as the crush came in a 139.134 mb, well below estimates of 145.739 mb and down from the March crush of 153.060 mb. It was also well below last year’s 147.6 mb crush.

Increased farmer selling from South America looks to cap rallies unless a major weather threat develops. With the crop getting planted, the market will be quick to add weather premium if adverse weather develops.

Strategy and outlook: Commercials are bullish and producers should have re-owned previous sales ahead of the growing season. Look to make old and new crop sales on rallies during the next six weeks.

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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