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By Staff | Aug 27, 2018

Prices for U.S. farm exports fall

As the trade battle continues to plague shipments of some ag goods, new export numbers from the Department of Labor reveal prices for U.S. farm exports fell 5.3 percent in July; the most in more than six years. Soybean prices plummeted 14.1 percent, as China currently has a 25 percent tariff on U.S. soybeans. In July, the Trump Administration tried to ease some of farmers’ financial fears by announcing a $12 billion emergency aid package. It’s money that will go to farmers caught in the escalating trade battle. However, it’s details about the U.S. Department of Agriculture’s plan that are still vacant, with some farmers searching for more clarity as harvest nears. University of Missouri’s Food and Agricultural Policy Research Institute (FAPRI) is analyzing the little details already out, trying to assess what payments could be. Pat Westhoff, director of FAPRI-MU says while he has no idea what payments will actually be, he anticipates soybean payments to range from 25 cents per bushel to no more than $1 per bushel.

Checkoff supporters concerned about R-CALF

The beef checkoff faces new challenges in 13 states as opponents have expanded their legal campaign following a Montana injunction last year. The Ranchers-Cattlemen Action Legal Fund, United Stockgrowers of America (R-CALF USA) has asked District Court Judge Brian Morris, Great Falls, MT, to expand the injunction to include checkoff funds in Hawaii, Indiana,Kansas, Nebraska, Nevada, New York, North Carolina, Pennsylvania, South Carolina, South Dakota, Texas, Vermont and Wisconsin. R-CALF’s latest action has heightened concern among state beef councils across the country, and brought further warnings from checkoff supporters who claim R-CALF’s efforts are supported by the Humane Society of the United States (HSUS). That claim is tied to the fact R-CALF is represented by Public Justice, an organization that has represented HSUS in the past.

New record could be set on exports of grain

U.S. exports of grain in all forms (GIAF) are on track to set a new record in 2017/2018, with two months of sales left to report, according to data from the USDA)and analysis by the U.S. Grains Council (USGC). During the first 10 months of the marketing year (September 2017 to June 2018), the United States exported 98.3 million metric tons (38.7 billion bushels) of grain in all forms, up 2 percent year-over-year from last year’s record-setting pace. The feed grains in all forms calculation helps capture how much of U.S. coarse grain production is actually used in the world market by including the corn equivalent of co-products like ethanol and distiller’s dried grains with solubles (DDGS) as well as beef, pork and poultry meat exports.

Cattle thieves nabbed

A sting operation in Oklahoma has resulted in the arrest of two cattle thieves. An investigation led by the Oklahoma Department of Agriculture resulted in the arrest of Madeline Draughon and Austin Temple who allegedly attempted to sell stolen cattle.

On August 3, the pair brought in seven head of cattle to the Purcell Livestock Auction in Oklahoma. Running the auction barn for four decades, C.T. Stallings thought something was strange. After inspecting the brands closer he realized they were owned by his friend Glenn Floyd because they bore his FC brand for Floyd Cattle.

Corn analysis

Corn closed the week $.07 3/4 higher. Last week, private exporters a sale of 114,572 mts to an unknown destination and a 213,372 mts sale to Mexico.

Weekly export sales of corn totaled 54.5 mb (1,383,800 mt) as of August 9 with 13.3 mb (339,000 mt) for the 2017-18 season. Total shipments plus outstanding sales in 2017-18 are now 2.372 bb, 7 percent above the previous marketing year. In the weekly crop conditions report, U.S. corn crop conditions fell 1 percent to 70 percent good/excellent versus 70 percent expected, 71 percent last week and 62 percent last year. 26 percent of the nation’s corn crop is dented versus only 13 percent on average.

In the weekly EIA report saw crude stocks increase by 6.81 mb versus an expected drawdown of 2.50 mb. U.S. ethanol production declined to 1.072 million barrels/day (315 million gallons/week) from 1.100 mbpd (mil gal/week) the week prior and was 1.2 percent above last year’s same-week production of 1.059 mbpd.

The results of the weekly Pro Farmer crop tour will be closely watched. History indicates a big crop will get even bigger, and the crop size will have to, to keep up with the huge demand base. Producers should look to maintain ownership of as much crop as possible into next spring.

Strategy and outlook

Typical rallies in late summer are 30 to 50 cents, which would be an excellent opportunity to make additional catch up sales if given the opportunity on production that can not be stored at harvest.

Soybeans analysis

Soybeans closed the week $.37 higher. Last week, private exporters 296,404 mts of soybeans to Mexico.

Weekly export sales of soybeans totaled 25.9 mb (705,000 mt) with 4.9 mb (133,400 mt) for the 2017-18 marketing year. Total shipments plus outstanding sales are now 2.156 bb, 4 percent less than a year ago.

In the weekly crop progress and conditions report, U.S. soybean crop conditions also fell 1 percent to 66 percent good/excellent versus 66 percent expected, 67 perent last week and 59 percent last year. 84 percent of the crop is setting pods versus 72 percent on average.

NOPA crush report for July came in at 167.733 mb versus estimates of 161. 7 mb. Well above last year of 144.7 mb and last month of 159.2 mb.

This was the 4th highest monthly crush on record. Soyoil stocks were at 1.764 billion pounds and soymeal estimates were 737,465 tons. Both figures were less than what was reported for the previous month. History tells us that big crops get bigger, which will increase U.S. stocks even further until China reemerges as a buyer of U.S. soybeans. Brazil and Argentina will both increase their soybean seedings this fall to take advantage of increased soy demand.

Strategy and outlook

Typical rallies in late summer are 30 to 50 cents, which would be an excellent opportunity to make additional catch up sales if given the opportunity on production that can not be stored at harvest.

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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