Midwest Marketing Solutions
Deere reports decine in income
Deere reports third quarter net income of $899 million. That compares to $910 million in the same quarter last year.
With the release of the financials, Deere CEO and Chairman Samuel Allen said the trade war and the subsequent decline in farm income has discouraged farmers from buying machinery. Sales of tractors, combines and other farm equipment fell six percent from one year ago and profits from the farm equipment business declined 24 percent.
A federal judge in Minneapolis has dismissed an antitrust lawsuit against Hormel Foods, JBS USA, Smithfield Foods, Tyson Foods and Agri Stats, which is a data provider.
The pork processors faced allegations they limited supplies to boost profits. The judge said the plaintiffs failed to show any illegal attempts to manipulate prices.
Trunz pleads guilty
Christiaan Trunz, another former JP Morgan metals trader, pleaded guilty on Tuesday to conspiracy and to manipulating prices in the precious-metals market as part of the U.S. government’s continuing crackdown on bogus spoofing trades.
Trunz, 34, admitted during a hearing in federal court in Brooklyn, New York, that he also used spoofing to manipulate precious metal prices and to extract a profit while he worked at Bear Stearns and at JPMorgan between 2007 to 2016. He pleaded guilty to in connection with a specific spoofing incident in June 2016.
Corn closed the week $.14 lower. Last week, private exporters announced sale of 328,000 mts of corn to Mexico for 2019/20 marketing year.
In the weekly export inspections report; U.S. corn exports last week of 20.1 million bushels were a 4-week low but were in line with the roughly 19 million bushels/week estimated that are needed in the final two weeks of the marketing year if the USDA’s 2.100 billion bushel export projection is to be met.
Cumulative export inspections of 1.817 billion bushels are down 16 percent from last year’s 2.171 billion at this time. In the weekly crop conditions report; the report showed corn rated good/excellent (G/EX) as of August 18th at 56 percent compared to 68 percent last year.
The poor/very poor (P/VP) rating went up 1 percent to 14 percent. Major producing states with improving conditions were Illinois at 42 percent (+2 percent), North Dakota 73 percent (+2 percent). Declining conditions in major producing states were Nebraska 74 percent (-1 percent), Minnesota 55 percent (-1 percent), Kansas 51 percent (-3 percent), Indiana 32 percent (-1 percent), South Dakota 62 percent (-2 percent), Missouri 36 percent (-3 percent), and Ohio 32 percent (-2percent). 95 percent of the crop is silking while 55 percent is in the dough stage and 15 percent is dented. Normally, 30 percent of the crop is dented by now.
Strategy and outlook
Producers should use more option strategies this year than in previous years to provide greater marketing flexibility.
Soybeans closed the week $.24 lower. Last week, private exporters did not announce any export sales.
In the weekly export inspections report, U.S. soybean exports, for the week ended 8/15/19, were a 25-week high at 42.6 million bushels.
This week’s activity included 20.24 mb exported to China and would lower their remaining old crop sales on the books to roughly 84 mb based on last week’s export sales data. Given the rather strong exports over the last three weeks, it appears the USDA’s 1.700 billion bushel export projection is likely to be reached, if not even slightly exceeded, if China continues to strongly ship in the final two weeks of the year.
Over the last four weeks, total soybean exports of 154 million bushels compares to 107 million during the same period last year.
In the weekly crop conditions report; the crop condition report showed soybeans rated good/excellent (G/EX) as of August 18th at 53 percent versus 54 percent last week and 65 percent last year.
The poor/very poor (P/VP) rating was at 14 percent versus 13 percent last week.
Major producing states with improving conditions were Illinois at 40 percent (+1 percent), Minnesota 60 percent (+1 percent), North Dakota 63 percent (+1 percent), and South Dakota 56 percent (+3 percent).
Declining conditions in major producing states were Iowa at 61 percent (-2 percent), Indiana 33 percent (-1 percent), Missouri 44 percent (-3 percent), Nebraska 72 percent (-1 percent), Kansas 48 percent (- 2 percent), Arkansas 55 percent (-4 percent), and Wisconsin 65 percent (-1 percent). 90 percent of the soybean crop is blooming and 68 percent is setting pods.
Strategy and outlook
Large carryover stocks gives the market some cushion in case of lower yields.
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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