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Midwest Marketing Solutions

By Staff | Sep 13, 2019

MGEX has fourth best month

MGEX reported August 2019 as the fourth best month in the history of the Exchange with a total of 283,743 contracts traded.

This is the fifth consecutive August to hold a spot in MGEX’s record book for best overall month, and the second-best August in history. In conjunction with these achievements, August was the fourth best electronic month in history with a total of 249,531 contracts. Options volume is reported at 4,388 contracts, which is nearly double in comparison to July’s total.

Market Facilitation Program payments

USDA released more details on how the Market Facilitation Program payments are calculated.

NDSU Extension Agricultural Finance Specialist Bryon Parman says this year’s program payments are significantly different from last year.

“The soybeans are $2.05, compared to last year’s $1.65. The corn went up one cent going into this calculation to 14 cents per bushel,” said Parman. “Interestingly, some of these other crops, like barley and canola, if you grew them this year and last year, you still get a payment. However, if there was a bunch of it in the county, it dropped the county payment rate down.”

Corn analysis

Corn closed the week $.13 lower. Last week, private exporters did not announce any export sales.

In the weekly export inspections report; Corn exports ended the 2018/19 marketing year with only 14.0 million bushels shipped, down from the previous week’s 25.4 million bushels and well below last year’s 52.6 million bushels.

It was also the second lowest of the entire marketing year behind the last week of June’s 11.2 million bushels.

With two days of data remaining, 2018/19 cumulative corn export inspections were 1.857 billion bushels versus last year’s 2.273 billion.

In the weekly crop progress and conditions report; U.S. corn conditions improved slightly to 58 percent good/excellent (g/e) versus 58 percent expected, 57 percent last week and 67 percent last year. Only 81 percent of the crop has reached the dough stage versus 93 percent on average.

That leaves 17 million acres of corn not in dough stage yet. 41 percent has reached the dent stage versus 63 percent on average.

Strategy and outlook

Harvest data will be key for the markets and price direction. Early yields should be the best of the year.

Soybeans analysis

Soybeans closed the week $.11 lower. Last week, private exporters announced sale of 451,766 mts of soybeans to Mexico for 2019/20.

In the weekly export inspections report, U.S. soybean exports for the week ended 8/29/19, the last full week of the 2018/19 marketing year, were very strong at 47.1 million bushels, up from the previous week’s 35.5 million bushels and notably above last year’s same-week exports of 28.5 million bushels.

China aggressively loaded soybeans in the last week of the marketing year, with 28.6 mb shipped and would leave roughly 36.4 mb of soybeans on the books to carry over to 2019/20. USDA’s old crop sales forecast of 1.700 bb should easily be hit and may need to be adjusted slightly higher.

U.S. soybean crush in July was reported by USDA at 179.5 million bushels, slightly above the average trade estimate of 178.5 million bushels and up sharply from June crush of 157.6 million bushels as well as marginally above last year’s July crush of 178.9 million bushels. This reflects a new record for the month of July.

In the weekly crop progress and conditions report; U.S. soybean conditions remain unchanged at 55 percent g/e versus 56 percent expected, 55 percent last week and 66 percent last year. 86 percent is setting pods with 96 percent of the crop blooming. That leaves 10.7 million acres of soybeans yet to set a pod.

Strategy and outlook

October meetings would be the perfect time for the U.S. and China to reach a trade agreement.

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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