Midwest Marketing Solutions
Sisseton Livestock fined
USDA has assessed Sisseton Livestock a $20,000 civil penalty with $10,000 held for two years. In April of last year, Sisseton Livestock was investigated for issuing false invoices.
Borden Dairy Company filed bankruptcy
Borden Dairy Company has filed for Chapter 11 bankruptcy. The dairy processor plans to continue with its normal operations during the reorganization process. Borden CEO Tony Sarsam said the company is being impacted by the rising cost of raw milk and the market challenges facing the dairy industry. Borden is the second major U.S. dairy processor to seek bankruptcy protection in recent months, following Dean Foods which filed in November.
Corn closed the week $.03 higher. Last week, private exporters announced sale of 137,000 mts of optional origin corn to South Korea.
In the weekly export inspections report; U.S. corn exports last week were poor again at 18.1 million bushels and down from the previous week’s 21.7 million and less than half last year’s same-week exports of 39.9 million bushels.
Over the last 7 weeks, corn exports have averaged just 19.4 million bushels/week vs last year’s 35.6 million/week during the same period.
Even with last Friday’s considerable reduction in the USDA’s export projection to 1.775 billion bushels, corn exports will still need to average roughly 39 million bushels/week through the end of August, a level not achieved a single time of the first 19 weeks of 2019/20 as marketing year high weekly exports are just 27.5 million bushels.
Cumulative exports of 357 million bushels are down 54 percent from last year versus the USDA’s new export projection reflecting an estimated 14 percent decline on the year.
In the weekly EIA report; U.S. ethanol production, for the week ended 01/10/20, jumped to 1.095 million barrels/day (322 million gallons/week) from 1.062 mbpd (312 mil gal/week) the week prior, representing a 31-week high and the 4th highest weekly production on record since EIA began reporting weekly data in June 2010.
The surge in U.S. ethanol stocks continued for the 2nd week in row with another 23 million gallon (544k barrel) increase to 966 million gallons (23.006 mil barrels) following the previous week’s record 60 million gallon jump.
Strategy and outlook
The bullish weekly reversal should limit the fund and speculative selling interest. The sluggish fundamentals will limit the upside potential.
Soybeans closed the week $.16 1/2 lower. Last week, private exporters announced sales of 120,000 mts of soybeans to an unknown destination, 126,000 mts of soybeans to China and 180,000 mts of soybean meal to the Philippines.
In the weekly export inspections report; U.S. soybean export inspections, for the week ended 1/09/20, were respectable at 41.8 million bushels, rising from the previous week’s 38.2 million bushels and were a 4-week high.
Over the last four weeks, soybean exports have averaged 39.2 million bushels/week, well above last year’s 29.7 million/week during the same period.
Cumulative export inspections of 844 million bushels are up 25 percent from last year’s 676 million at this time, with exports needing to average roughly 26.2 million bushels/week through the end of August in order to reach the USDA’s 1.775 billion bushel export projection versus last year’s 30.3 million/week average from this point forward.
The NOPA monthly crush report saw crush came in at 174.81 million bushels versus 171.2 million bushels that was expected. This was a new record for December and the 2nd highest crush month in history. Soybean oil stocks came in at 1.757 billion pounds versus 1.507 bps estimated, a 21 percent increase and the highest in 8 months.
Strategy and outlook
Futures probed weekly resistance and turned lower. South America looks to produce a record soybean crop if weather is normal during the next 2-3 weeks. This will surely cut into U.S. exports and limit the upside potential
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.
Please Enter Your Facebook App ID. Required for FB Comments. Click here for FB Comments Settings page