Midwest Marketing Solutions
The Trump Administration has authorized the second tranche of Market Facilitation Program payments, which will be made later this month or in early December.
“I full expect the November payments to be distributed,” says Pro Farmer policy analyst Jim Wiesemeyer. The third traunche of MFP payments are anticipated in early 2020. “I don’t see any reason not to distribute them. Even if the U.S. were to get an agreement with China, it’s only phase one and it is going to take time to implement; up to two years, if not longer.”
Corn closed the week $.05 3/4 lower. Last week, private exporters did not announce any private sales.
In the weekly crop progress report; U.S. corn harvest advanced to 66 percent complete versus 68 percent expected, 52 percent last week, 83 percent last year and 85 percent average. North Dakota is only 15 percent done versus 76 percent normally with South Dakota 39 percent done versus 82 percent on average.
Other states well behind their normal pace include Wisconsin at 30 percent, Michigan at 33 percent, Iowa at 64 percent and Minnesota at 63 percent. U.S. corn exports last week of 22.1 million bushels were up solidly from the previous week’s 11.2 mil bu and were the third best of the first 10 weeks of the 2019/20 marketing year. However, this week’s exports were still considerably below the roughly 36.6 million bushels/week estimated corn will need to average through the end of next August if the USDA’s 1.850 billion bushel export projection is to be met. Cumulative exports of 170 million bushels are currently down 61 percent from last year’s 438 million and are the 2nd lowest of the last 45 years for early November, only minimally beating out 2012/13 which saw an annual export total of just 730 million bushels.
Strategy and outlook
Stocks look to remain large with the poor demand pace. Commercial buying has lifted the index to a bullish position. The buy signal is likely premature as it is not a timing indicator.
Soybeans closed the week $.12 1/4 lower. Last week, private exporters announced sales of 106,000 mts of soybeans to an unknown destination and 129,000 mts of soybeans to China for 2019/20.
In the weekly crop progress report, U.S. soybean harvest is now 85 percent complete versus 87 percent expected, 75 percent last week, 87 percent last year and 92 percent average.
Missouri is the laggard with only 72 percent harvested, followed by Wisconsin at 71 percent, Michigan 74 percent and North Dakota 74 percent .
U.S. soybean exports of 48.9 million bushels were down slightly from the previous two weeks’ 54.5 million and 58.0 million bushels while being in line with last year’s same-week exports of 49.9 million bushels. Exports over the first 10 weeks of the 2019/20 marketing year averaged 41.5 million bushels/week, above the average “needed” pace from this point forward of roughly 31.5 million bushels/week in order for the USDA’s 1.775 billion bushel export projection to be met. Cumulative exports of 400 million bushels are currently up 9 percent from last year’s 367 million.
Strategy and outlook
The COT report remains bearish for the soybean complex with aggressive commercial selling offsetting the strong fund buying.
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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