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By Staff | Jun 27, 2017

It’s the first export in more than 13 years of beef from a U.S. meat packer destined for the bellies of Chinese consumers, whose growing appetites for red meat fueled an estimated $2.6 billion in beef imports in 2016. The USDA on Monday announced rules for sending U.S. beef to China, part of a bilateral agreement begun under the Obama administration and finalized under President Donald Trump’s watch. “China has the potential to be the largest market for U.S. beef,” said Henry Davis, CEO of the Omaha meat-packing facility, during a Wednesday news conference with Gov. Pete Ricketts.”This will be the first of many shipments.”

Corn analysis

Corn closed the week $.03 3/4 lower. Last week, private exporters reported sales of 130,000 mts of corn to an unknown destination and 120,000 mts of corn to Mexico.

Weekly export sales of corn showed a total of 24.2 mb (614,200 mt) with 23.6 mb (600,700 mt) for the 2016-2017 marketing year. This was above the 7.5 mb (190,300 mt) needed this week to be on pace with USDA’s June demand projection of 2.225 bb. In the weekly crop progress and condition report, NASS reported U.S. corn crop conditions at 67 percent good/excellent, in line with expectations and down 1percent from last week.

Last year’s the crop was rated 75 pecent g/e. Informa updated 2017 acreage with corn at 90.186, up 190,000 from March. U.S. ethanol production has fallen below last year’s same-week rate in each of the last two weeks as production for the week ended 6/09/17 1.002 million barrels/day (295 million gallons/week) was 1.1 percent below last year’s 1.013 mbpd and followed last week’s production being down 0.7 percent. There is still time for a weather market to develop, but good rains in the eastern cornbelt leaves the western belt as the lone dry area remaining.

Corn is pollinating in Missouri and rains will help the crop reach full yield potential.

Strategy and outlook

Look to make sales and lock in prices during rallies over the next 4 weeks.

Soybean analysis

Soybeans closed the week $.00 1/4 lower. Last week, private exporters did not report any private sales. Weekly export sales of soybeans showed a total of 24 mb (654,200 mt) with 12.5 mb (340,200 mt) for the 2016-2017 marketing year. This raised total sales to 2.166 bb, 6 percent above USDA’s June demand projection of 2.050 bb. The weekly crop progress report The first U.S. soybean crop conditions of the year are 66 percent good/excellent, lower than 69 percent expected and well below last year’s 74 percent rating. This is the lowest conditions in 4 years for mid-June.

U.S. soybean planting is 92 percent, now ahead of last year’s 91percent rate. Informa updated 2017 acreage with soybean acreage at 89.362 million, up 120,000 from the March estimate. The NOPA crush report placed May crush at 149.2 million bushels, about 6 mb higher than average trade estimates for the month that called for 143 mb. This was one of the largest crush figures for the month of May and rebounded from a crush of 139.134 mb in April. May NOPA soyoil stocks were reported at 1,749 bln pounds, up 24 mln pounds.

Strategy and outlook

Producers need to make new crop sales on rallies during the next 4 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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