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By Staff | Jun 9, 2017

A Wisconsin grain buyer and shipper found guilty of defrauding 65 farmers and four banks will spend three years in prison. 63-year-old Douglas Weinkauf was sentenced in federal court after falsifying loan collateral documents in 2009.

Audits showed the amount of grain actually held by Wisconsin Rapids Grain and Ruby Grain in Wisconsin Rapids, Brokaw, and Blair Wisconsin was worth millions of dollars less than what was claimed for collateral. The business went broke, leaving farmers and banks unpaid. Weinkauf was also ordered to pay more than 13 million dollars in restitution to the banks. The USDA closed the business nearly five years ago.

Corn analysis

Corn closed the week $.01 3/4 lower. Last week, private exporters did not report any private sales.

Weekly export sales of corn showed a total of 21.7 mb (551,800 mt) with 16.2 mb (412,100) sold for the 2016-2017 marketing year. This was above the 8.5 mb (215,400 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 crop conditions at 65 percent good/excellent versus 68 percent expected (65-71 percent range of ideas) and 72 percent last year.

This was the lowest late May conditions in 5 years and below the 10 year average of 69 percent. Historically, ratings below 70 percent g/e do not translate into above trendline yields. U.S. corn planting is virtually complete at 91 percent versus 92 percent expected (89-96 percent range of ideas), 84 percent last week, 93 percent last year and 93 percent average. In the weekly EIA report, U.S. ethanol production rose to 1.020 million barrels/day (300 million gallons/week) from the previous week’s 1.010 mbd (297 mil gal/week) and a rather solid 6.3 percent above last year’s same-week production of 960k bpd.

U.S. ethanol stocks posted a modest increase last week to 956 million gallons (22.763 million barrels) from 953 million gallons.

The market will want to be bullish as the key pollination time period is directly ahead of the market, however, it will take weather concerns during June to ignite a rally. Producers will want to use options as a way to manage risk and provide price insurance. This will enable producers to make sales and cover the upside if weather is adverse.

Strategy and outlook

Look to make sales and lock in prices during rallies over the next 6 weeks.

Soybeans analysis

Soybeans closed the week $.02 1/2 lower. Last week, private exporters reported a sale of 130,000 mts of soybeans to an unknown destination and 200,000 mts to Spain.

Weekly export sales of soybeans showed a total of 23 mb (626,200 mt) with 22.4 mb (610,200 mt) for the 2016-2017 marketing year. This raised total sales to 2.147 bb, 5 percent above USDA’s May demand projection of 2.050 bb. The weekly crop progress report showed NASS reported U.S. soybean plantings at 67 percent complete versus 68 percent expected (60-75 percent range of ideas), 53 percent last week, 71percent last year and 68 percent average. With the crop getting planted, the market will be quick to add weather premium if adverse weather develops.

The month of June is not the key reproductive month for soybeans, however, the market will be quick to add a premium into prices on less than ideal weather. Rains after June 15 will be viewed as beneficial to crop development and negative for prices. However, dryness in the month of June will send prices sharply higher.

Strategy and outlook

Producers need to make new crop sales on rallies during the next 6 weeks as large supplies of product will be hitting the market from not only the U.S. but also from South America.

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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