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Midwest Marketing Solutions

By Staff | Sep 19, 2019

Tyson Foods plant to reopen

Tyson Foods says its Holcomb, Kansas plant, damaged by fire in August, is expected to be fully operational by January. Tyson Foods CEO Noel White says some beef processing has already resumed in a portion of the plant that was not impacted by the fire.

Suit filed against ADM

An energy trading firm has filed a class action lawsuit against Archer Daniels Midland, claiming ADM manipulated the cash ethanol price. AOT Holdings is seeking damages of up to $6.3 million.

Corn analysis

Corn closed the week $.13 3/4 higher. Last week, private exporters announced sales of 1,042,906 mts of corn to Mexico.

In the weekly export inspections report; U.S. corn exports, for the week ended 9/05/19, the first week of the 2019/20 marketing year, 23.2 million bushels and were up from the previous week’s poor 14.1 million bushels.

Based on the USDA’s 2019/20 export projection of 2.050 billion bushels, corn export inspections will need to average roughly 36-37 million bushels/week throughout the marketing year.

In the weekly crop progress and conditions report; U.S. corn conditions fell 3 percent to 55 percent good/excellent (g/e) versus 58 percent expected, 58 percent last week and 68 percent last year.

Conditions in Illinois were down 8 percent g/e. This was the lowest corn conditions of the year so far.

Only 11 percent of the crop is considered mature versus 24 percent on average while 55 percent is dented versus 77 percent on average.

In the monthly WASDE report, the USDA placed the U.S. corn yield at 168.2 bushels per acre, within estimates between 162.0 and 171.5 bushels per acre. This was down from last month’s 169.5 bpa figure but above the average trade guess of 166.5 bpa.

Corn production was placed at 13.799 billion bushels, within estimates of 12.620 and 14.003 billion bushels but also above trade estimates of 13.557 bb. U.S. 2018-2019 ending stocks were 2.445 bb as the USDA lower the export profile while the 2019-2020 ending stocks were 2.190 down from last year’s 2.445 bb but a small increase from last month’s 2.181 bb estimate.

Stocks to use ratio is 15.5 percent. World ending stocks were 306.3 million tonnes, within estimates of 292.7 to 310.

Strategy and outlook

A bullish technical weekly reversal suggests the lows are in for the fall.

Soybeans analysis

Soybeans closed the week $.40 3/4 higher. Last week, private exporters announced sale of 204,000 mts of soybeans to China; 138,000 mts of soybeans to Mexico and 195,750 mts of meal to Mexico.

In the weekly export inspections report, U.S. soybean exports last week were 33.3 million bushels and were down from the previous week’s 47.4 mb and slightly below last year’s same-week exports of 34.1 million bushels.

Based on the USDA’s 1.775 billion bushel export projection this year, export inspections will likely need to average 33-34 million bushels/week over the entirety of the marketing year vs last year’s 32.2 million bushel/week average to reach this projection.

In the weekly crop conditions report; U.S. soybean conditions were unchanged at 55 percent g/e versus 55 percent expected, 55 percent last week and 68 percent last year.

In contrast to corn, U.S. soybean conditions hit highest of the year so far. This comes despite eastern soybean belt states falling 5 percent in Illinois and 1 percent in Indiana.

In the monthly WASDE report; the USDA placed the U.S. soybean yield at 47.9 bushels per acre, within estimates of 45.5 and 49.0 and up slightly from 47.2 bpa estimated prior to the report.

Soybean production was placed at 3.633 billion bushels, above estimates of 3.578 bb but down from a month ago when the estimate was 3.680 bb. U.S. 2018-2019 ending stocks were 1.005 billion bushels down from last month’s 1.070 bb figure as the USDA increased crush and export demand, while the U.S. 2019-2020 ending stocks were 640 million bushels, slightly less than the estimate prior to the report of 660 mb and down 115 mb from last month. It was still the second largest figure in history. The world ending stocks were 99.2 million tonnes, within estimates of 89.6 to 119.

Strategy and outlook

October meetings would be the perfect time for the U.S. and China to reach a trade agreement. A bullish technical weekly reversal suggests the lows are in for the fall.

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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