Midwest Marketing Solutions
Anheuser-Busch to stop running ads on claims of corn syrup
A Wisconsin judge has ordered Anheuser-Busch to stop running advertisements saying that Miller Light beer contains corn syrup. The lawsuit began back in March, with MillerCoors claiming as much as $30 million was spent on Bud Light’s corn syrup campaign. In particular, a Bud Light Super Bowl ad drew criticism from the National Corn Growers Association.
Titan Machinery reports profits
Titan Machinery reports first quarter profits of $54 million on gross income of $278 million. That compares to a profit of $47.6 million one year ago.Titan Chief Financial Officer Mark Kalvoda says the revenue increase was across all business segments.
“Equipment revenue was up 15.6 percent, parts and service was up 10.7 percent and 14 percent respectively,” he said.
Equipment sales for the first quarter are reported $194 million compared to $168 million last year. Parts sales are up $5 million from last year to $52 million. Titan says operating expenses increased by nearly $6 million to $52.6 million.
Corn closed the week $.37 1/2 higher. Last week, private exporters announced sales of 175,000 mts of corn to Mexico for 2019/20 and 125,613 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year.
U.S. corn exports last week were 33.5 million bushels (mb) and were up a bit from the previous week’s 29.3 mb.
It was slightly below the 38.1 mb/week estimated that corn shipments will need to average through the end of August in order to reach the USDA’s 2.300 billion bushel (bb) export projection.
In the weekly crop progress report; U.S. corn planting advanced to 83 percent complete versus 83 percent expected, 67 percent last week, 99 percent last year and 99 percent average.
The first U.S. corn condition rating of the season saw corn rated at 59 percent good/excellent versus 54 percent expected and 77 percent last year.
Conditions are the lowest for early June since 1996. Corn emergence is only 62 percent nationally versus 93 percent normally.
Roughly 15.8 million acres of corn remains to be planted based on the USDA’s March 29 Prospective Plantings report estimate versus 1.7 million which would have been left to plant based on an average planting pace.
In the monthly supply/demand report, the USDA who is normally very conservative in their yield changes, reported the 2019/20 yield at 166.0 bpa, down 10 bpa from their May report. This was a much larger reduction in yield than the trade had estimated. Given market conditions, the yield reduction was certainly justified. In addition, the USDA lowered corn acres for 2019/20 by 3 million acres.
In the acreage report at the end of the month, the trade will be looking for a larger acreage cut. With the yield and acreage reduction, total production is forecast at 13.680 bb, nearly 800 mb less than a year ago and not large enough to meet our current demand base. 2019/20 world ending stocks were lowered 24.19 million metric ton (mmt) (34.19 mmt in U.S. production, 7.62 mmt cut to U.S. feed) while Argentina’s corn crop was raised 1.0 mmt to 50.0 mmt and Canada’s corn was lowered 1.4 mmt to 14.0 mmt.
Strategy and outlook
With funds now going net long due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies. July corn is closing in on major weekly resistance.
Soybeans closed the week $.41 3/4 higher. Last week, private exporters announced export sales of 130,000 mmt of soybeans for delivery to China during the 2018/2019 marketing year; and export sales of 130,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year; and cancellations of export sales of 136,000 metric tons of soybeans for delivery to China during the 2018/2019 marketing year.
U.S. soybean exports were 26.3 mb and up solidly from the previous week’s 18.8 mb, but were once again solidly below the 35.3 mb/week needed through the end of August if the USDA’s 1.775 billion bushel export projection is to be met.
U.S. soybean planting 60 percent complete versus 56 percent expected (49-65 percent range), 39 percent last week and 88 percent average.
Emergence is 34 percent versus 73 percent on average. An estimated 51.1 million acres of soybeans have been planted so far versus 73.6 million which would have been planted if planting were moving in line with average levels.
Roughly 33.6 million acres of soybeans remain to be planted based on the USDA’s March 29 Prospective Plantings report estimate versus 11.0 million which would have been left to plant based on an average planting pace.
In the monthly supply/demand report, the USDA made very minimal changes. 2018/19 carryout went from 995 mb in May to 1.07 bb in June as they lowered old crop demand by 75 mb to increase the carryout. The USDA left planted acreage and yield estimates alone, likely saving any acreage changes until the June 28 acreage report. The trade will naturally assume with the late planted nature of the corn crop, some acres will be shifted to soybeans despite the financial incentive to do so. 2019/20 carryout went form 970 mb in May to 1.045 bb in June. 2019/20 exports were left unchanged.
Strategy and outlook
With funds covering shorts due to adverse weather conditions, producers should use the rally to exit old crop inventories and focus on marketing new crop supplies.
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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