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BRIAN HOOPS

By Staff | Jun 1, 2017

In the monthly COF report, cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.0 million head on May 1,2017. The inventory was 2 percent above May 1, 2016. Placements in feedlots during April totaled1.85 million head, 11 percent above 2016. Net placements were 1.78 million head. During April, placements of cattle and calves weighing less than 600 pounds were 348,000 head, 600-699 pounds were 255,000 head, 700-799 pounds were 490,000 head, 800-899 pounds were 495,000 head, 900-999 pounds were 190,000 head, and 1,000 pounds and reater were 70,000 head. Marketings of fed cattle during April totaled 1.70 million head, 3 percent above 2016.

Corn analysis

Corn closed the week $.01 1/2 higher. Last week, private exporters reported sales of 115,400 mts to an unknown destination.

Weekly export sales of corn showed a total of 18.0 mb (457,700 mt) with 18.0 mb (457,200) sold for the 2016-2017 marketing year. This was above the 9.2 mb (232,500 mt) needed this week to be on pace with USDA’s May demand projection of 2.225 bb. In the weekly crop progress report, NASS reported U.S. corn planting is 84 percent complete versus 85 percent expected versus. 71 percent last week, 84 percent last year and 85 percent average.

Corn emergence is 54 percent versus. 58 percent last year and 55 percent on average.

The first g/e corn ratings of the year will be released this week. Historically, ratings below 70 percent g/e do not translate into above trendline yields. In the weekly EIA report, U.S. ethanol production declined to 1.010 million barrels/day from 1.027 mbpd the previous week, but is still 6.8 percent above last year’s same-week production. Over the last 8 weeks, U.S. ethanol production has been 6.0 percent above year ago levels. Compared to the USDA’s current 2016/17 corn for ethanol usage estimate of 5.450 billion bushels, ethanol production is expected to be 1.2 percent below year ago levels.

The 2017 growing season is off to a less than ideal start. The best time for a rally is in the next 6 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 6 weeks.

Soybeans analysis

Soybeans closed the week 27 and a 1/4 cents. Last week, private exporters reported a sale of 126,000 mts of soybeans to an unknown destination.

Weekly export sales of soybeans showed a total of 17.6 mb (478,700 mt) with 17.4 mb (472,700 mt) for the 2016-2017 marketing year. This raised total sales to 2.125 bb, 75 mb above USDA’s May demand projectionof 2.050 bb.

The weekly crop progress report showed U.S. soybean seedings at 53 percent complete versus 52 percent expected, 32 percent last week, 53 percent last year and 52 percent average.

Soybean emergence is pegged at 53 percent versus 53 percent last year and ahead of the 5 year average of 52 percent. With the crop getting planted, the market will be quick to add

weather premium if adverse weather develops. Prices fell below key technical support on increased South American selling and prices look to drift lower unless a weather threat develops. The key reproductive period for soybeans is still months ahead. There is plenty of time for a weather issue to develop as no growing season is perfect.

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 6 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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