Bringing a landmark defamation case to a close, Beef Products Inc. has settled its $1.9 billion lawsuit against ABC News and correspondent Jim Avila over a series of reports that repeatedly referred to BPI’s signature product as “pink slime.”
Terms of the settlement are confidential, but judging from the celebratory mood of BPI officials and their lawyers Wednesday morning, one could conclude that terms of the settlement were favorable to the company.
“We are extraordinarily pleased with this settlement,” BPI attorney Dan Webb said in a brief statement outside the Union County Courthouse. “I believe we have totally vindicated the product.”
Corn closed the week $.10 3/4 higher. Last week, private exporters reported sales of 157,300 mts of corn to Mexico.
Weekly export sales of corn showed a total of 8.5 mb (214,800 mt) with 5.5 mb (140,300 mt) for the 2016-2017 marketing year. This was above the 4.1 mb (104,000 mt) needed this week to be on pace with USDA’s June demand projection of 2.225 bb.
In the weekly crop conditions report, U.S. corn crop conditions improved compared to last week with a rating of 68 percent good/excellent versus 66 percent expected, 67 percent last week and 75 percent last year.
The eastern belt improved while the western belt declined. Conditions improved 3 percent in Illinois (62 percent), Indiana 1percent (46 percent), Iowa 1 percent (79 percent) and Missouri 3 percent (66 percent).
Conditions deteriorated in Minnesota 3 percent (78 percent), North Dakota 5 percent (56 percent), South Dakota 3 percent (46 percent) and Nebraska 4 percent (74 percent).
Now what to expect in July. All of the U.S. corn is now planted and weather is the main focus of the market until we are past the key yield development timeframe. Our key yield development timeframe will occur past the normal timeframe, leaving July 4th through the 20th as our timeframe most sensitive to weather. Typically, funds exit longs during the third quarter of the year as the market trades lower into harvest, before funds buy into fresh longs in the last quarter of the year in hopes of a post harvest rally. A threat of frost could force a short-covering rally, so be quick to change your marketing strategy if adverse weather threatens the Midwest.
Strategy and outlook
Look to make sales and lock in prices during rallies over the next 4 weeks.
Soybeans closed the week $.50 3/4 higher. Last week, private exporters reported sale of 120,650 mts of meal to Mexico.
Weekly export sales of soybeans showed a total of 16.1 mb (438,700 mt) with 13.4 mb (365,500 mt) for the 2016-2017 marketing year. This raised total sales to 2.195 bb, or 7 percent above USDA’s June demand projection of 2.050 bb. U.S. soybean crop conditions fell 2 percent to 64 percent good/excellent versus 65 percent expected, 66 percent last week and 70 percent last year.
Conditions were unchanged in Iowa at 74 percent good/excellent, improved in Illinois 3 percent to 70 percent, Missiouri 1 percent (64 percent) and deteriorated in Minnesota 1 percent (76 percent), North Dakota 5 percent (53 percent), South Dakota 9 percent (39 percent), Nebraska 2 percent (70 percent) and Indiana 1 percent (51 percent).
Now what to expect in July. The key pod setting stage looks to begin about July 15th and last until the August 5th time frame at which biggest gains in yields estimates can surface with timely rain or biggest upside gains in futures will occur if heat and dryness occurs. Highs are usually in by July’s end as there is normally weather that is threatening the development of the crop during the podsetting stage that will reduce yields and drive prices higher. With volatility extremely high, this is a high-risk weather market. Rain events that occur in late July and the first week of August should be sold as this will help the development of the crop.
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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