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Midwest Marketing Solutions

By Staff | Jul 26, 2019

CHS reports income

For the first nine months of the year, CHS reports net income of nearly $651 million. That compares to $535.5 million a year ago.

Income was down in the third quarter, influenced by the completion of CHS’s acquisition of the remaining 75 percent ownership interest in West Central Distribution. Quarterly earnings from the agriculture division were down, impacted by the poor weather, historic flooding on the river and the current trade disputes.

Cargill reports lower earnings

Cargill is reporting fourth quarter earnings of $476 million. That’s down from $809 million in the same period last year. For the year, Cargill’s net profits dropped 17 percent to $2.5 billion. Trade disputes and the wet start to the growing season are blamed for the downturn.

Corn analysis

Corn closed the week $.23 1/4 lower. Last week, private exporters did not report any export sales.

In the weekly export inspections report; corn exports were 26.6 million bushels (mb) were better than the roughly 22.7 mb/week estimated that is needed to average to reach the USDA’s just-lowered 2.100 billion bushel (bb) export projection.

In the weekly crop progress and conditions report; U.S. corn conditions were reported at 58 percent good/excellent versus 56 percent expected (54-58 percent range), 57 percent last week and 72 percent last year.

Iowa improved 1 percent to 62 percent good/excellent; Illinois improved 5 percent to 42 percent good/excellent; Indiana up 1 percent to 39 percent while Minnesota lost 2 percent to 58 percent good/excellent; Nebraska was unchanged at 76 percent good/excellent and Missouri improved 4 percent to 32 percent good/excellent.

Seventeen percent of the crop is silking, well behind the average of 42 percent for this time of year.

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 has failed at successive challenges of major weekly resistance.

Soybeans analysis

Soybeans closed the week $.12 1/4 lower. Last week, private exporters did not report any export sales.

In the weekly export inspections report; soybean exports, for the week ended 7/11/19 were 31.4 mb and were up from the previous week’s 28.0 mb. This was the highest in 14 weeks. If the USDA’s 1.700 bb export projection is to be met, total weekly shipments will need to average roughly 29.1 mb based on the USDA’s current estimate.

U.S. soybean conditions showed a 1 percent improvement to 54 percent good/excellent versus 53 percent expected (51-55 percent range), 53 percent last week and 69 percent last year.

Iowa lost 1 percent to 63 percent good/excellent; Minnesota lost 1 percent to 60 percent good/excellent and Nebraska lost 2 percent to 71 percent good/excellent; Missouri gained 6 percent to 41 percent good/excellent; Illinois gained 3 percent to 41 percent good/excekent and Indiana was up 1 percent to 41 percent good/excellent.

Only 22 percent of the soybean crop is in the bloom stage versus 49 percent normally at this time.

The monthly NOPA crush report was released on Monday morning. NOPA reported its members crushed 148.84 mb, well below estimates of 154.4 mb and the lowest in 21 months. This was lower than last month’s 154.8 mb and last year’s 159.2 mb.

Soybean oil stocks were 1.536 billion pounds (bp), slightly above estimates of 1.527 bp but down from last month’s 1.581 bp and well below last year’s 1.766 bp.

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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