Archer Daniels Midland is reporting second quarter operating profits of $1.8 billion. That’s based on the strength of its ag services and oilseeds processing businesses.

“We’re seeing things executed well, navigating dynamic conditions to deliver,” said Juan Luciano, CEO/chairman. “Even if we work tirelessly serving our customers and consumers around the globe, we are continuing to advance our strategy with productivity initiatives.”

Bunge reports second quarter net income of $206 million. That’s down from $362 million one year ago. Global supply chain problems increased operating costs, including a dramatic increase in freight rates.

Minneapolis Grain Exchange reported July 2022 trading volume of 236,941 contracts, representing a 20.3 percent year-over-year decrease and a 31.8 percent decrease from June 2022.

Total year-to-date volume reached 2,023,955 contracts, a decrease of 2.8 percent from the same period in 2021.

MGEX reported Hard Red Spring Wheat futures volume of 190,097 contracts in July 2022, a decrease of 23.4 percent and a decrease of 31.3 percent from June 2022. HRSW Options volume totaled 4,558 contracts in July 2022, a decrease of 70.5 percent and a 37 percent decrease from June 2022.

CORN

ANALYSIS

Corn closed the week $.13 1/4 lower. Last week, private exporters did not announce any export sales.

In the weekly export inspections report; U.S. corn exports, for the week ended 7/28/22, were 33.7 million bushels, up modestly from the previous week’s 29.7 mil bu and again easily meeting the roughly 21.3 million bushels/week average pace that will be needed over the final five weeks of the 2021/22 marketing year in order to reach the USDA’s 2.450 billion bushel export projection.

Over the last five weeks, corn export inspections averaged 35.4 million bushels/week. Cumulative export inspections of 2.044 billion bushels are down nearly 18 percent from last year’s 2.484 billion bushels.

In the weekly crop progress and conditions report; U.S. national corn rating was posted at 61 percent g/e unchanged from last week while trade was looking for conditions to weaken to 60 percent. Corn was rated 62 percent last year. Iowa lost 4 percent to 76 percent.

Missouri lost 1 percent to 52 percent, Nebraska lost 3 percent to 54 percent while South Dakota was unchanged at 65 percent and Minnesota was also unchanged at 63 percent. North Dakota gained 5 percent to 79 percent while Illinois gained 3 percent to 74 percent and Indiana gained 4 percent to 50 percent. 80 percent of the crop is silking and 26 percent is in the dough stage.

In the weekly EIA report; U.S. ethanol production, for the week ended 7/29/22, rose to 1.043 million barrels/day from 1.021 mbpd the week prior, the highest in four weeks and 3 percent above last year’s same-week production of 1.013 mpbd, the largest year-over-year percentage difference in seven weeks.

U.S. ethanol stocks last week ticked up 23.394 mil barrels from 23.328 mil barrels the week prior and remain slightly above last year’s stocks at this time of 951 million gallons, a modest 31 million gallon (3 percent) increase.

STRATEGY & OUTLOOK

The corn market has found technical support on the charts and fundamental support from yield losses in the west. The trade believes the eastern cornbelt will have yields large enough to compensate for losses in the west.

SOYBEANS

ANALYSIS

Soybeans closed the week $.66 1/2 lower. Last week, private exporters announced sale of 4.9 mb of soybeans to an unknown destination for 2022/23, sale of 4.9 mb of soybeans to China for 2022/23 and 135,000 mts of soybean meal to Poland.

In the weekly export inspections report; U.S. soybean exports last week were 20.4 mil bu, up from the previous week’s 14.4 mil bu and were a seven-week high, but were still solidly below the roughly 33.0 million bushel/week average that is needed over the final five weeks of 2021/22 to reach the USDA’s 2.170 billion bushel export projection.

Over the last 10 weeks, soybean export inspections averaged only 16.4 million bushels/week, roughly half the current “needed” pace, leaving it highly unlikely the USDA’s export projection will be reached. Cumulative export inspections of 1.968 billion bushels are down 8.2 percent from last year’s 2.144 billion vs USDA estimating this year’s exports to be down 4 percent for the year.

In the weekly crop progress and conditions report; U.S. soybean rating came in at 60 percent g/e, a 1 percent improvement over last week and above expectations for 58 percent. Soybeans were rated 60 percent last year. Iowa lost 2 percent to 73 percent, Nebraska lost 3 percent to 57 percent while South Dakota gained 1 percent to 65 percent, North Dakota was up 1 percent to 63 percent, Minnesota gained 4 percent to 66 percent, Missouri gained 3 percent to 49 percent, Illinois gained 7 percent to 68 percent and Indiana was unchanged at 48 percent. 44 percent of the crop is setting pods and 79 percent is blooming.

The monthly census crush report saw the USDA report U.S. soybean crush in June was 174.1 million bushels, in line with average market expectations of 174.4 million (173.0-175.0 million range of ideas), down from 180.9 million bushels in May and up 7.6 percent from last year’s June crush of 161.7 million, but was below record June crush of 177.3 million bushels in 2020. With two months of data remaining in the 2021/22 marketing year, cumulative crush of 1.847 billion bushels is up 2.3 percent (41 million bushels) from last year’s 1.806 billion bushels, leaving July-August crush needing to total 358 million bushels in order to reach the USDA annual estimate of 2.205 billion bushels. USDA reported U.S. soybean oil production in June was 2.069 billion pounds vs 2.159 billion in May and 1.909 billion pounds last year, with the average soybean oil yield remaining very strong at 11.88 pounds/bushel, down from 11.93 in May but still solidly above last year’s 11.80 in June. USDA reported 442.0 million bushels of corn was used for ethanol production in June, nearly unchanged from 446.6 million in May, as well as last year’s June usage of 439.5 million bushels.

STRATEGY & OUTLOOK

Tight stocks suggest the market will be very sensitive to weather issues this month and in August as soybeans are a crop of August. The smaller planted acres this year leave little room in balance sheets to have lower yields.

WHEAT

ANALYSIS

For the week, Chicago wheat closed $.35 1/4 lower; Kansas City wheat closed $.30 1/2 lower and Minneapolis wheat $.19 1/4 lower. Last week, private exporters did not announce any sales.

In the weekly export inspections report; U.S. wheat export inspections last week were 9.4 mil bu, down from the previous week’s 17.5 mil bu, well below last year’s same-week exports of 14.9 mil bu and were the second lowest of the first nine weeks of the 2022/23 marketing year so far. Since the start of 2022/23, wheat shipments have averaged 12.1 million bushels/week, below the roughly 14.6 million/week that is needed to reach the USDA’s 800 million bushel export projection and well below the 16.9 million/week average during the same period last year. Accordingly, cumulative export inspections of 105 million bushels are now down 25% from last year’s 139 million vs USDA estimating this year’s marketing year total exports to be essentially unchanged from last year.

In the weekly crop progress and conditions report; spring wheat is rated 70 percent g/e, up 2 percent on the week and 3 percent more than trade expected, this is well above the 10 percent rating of last year. Minnesota gained 10 percent to 82 percent, North Dakota gained 2 percent to 80 percent while South Dakota lost 9 percent to 56 percent and Montana lost 1 percent to 42 percent. Winter wheat harvest advances to 82 percent vs. 90 percent last year and 85 percent on average.

STRATEGY & OUTLOOK

The fall in wheat values has now seen U.S. SRW become the cheapest wheat in the world. Seasonally, wheat demand rebounds now that wheat harvest has reached at least 50 percent harvested. Commercials have turned bullish on major technical support.

LIVE & FEEDER CATTLE

ANALYSIS

Last week, live cattle closed $2 higher while feeder cattle closed $2.10 higher.

Last week, there was moderate fed cattle cash trade in the north at mostly $140 to $144/cwt live and $225 to $232 dressed – steady to $2 firmer than last week. Light to moderate volumes traded in the south at $135 to $136, mainly steady to $1 higher than the prior week.

Last week; the FCE had 728 head offered for sale and 0 cattle sold.

The latest USDA steer carcass weights moved four pounds higher compared to the previous week at 893 pounds, which is one pound below last year.

This week’s net beef sales for 2022 were 12,000 mts with shipments of 18,500 mts.

STRATEGY & OUTLOOK

Producers should have window or fence strategies to protect the downside but allow for upside potential. A struggling economy looks to cap rallies in 2022. Commercials have turned bullish.

LEAN HOGS

ANALYSIS

Lean hogs closed the week $1.12 higher.

Iowa/southern Minnesota weekly hog weights for week ending July 30 has weights down slightly to 276.6 pounds vs. 276.7 pounds last week and 276.6 pounds last year.

This week’s net pork sales were 2022 of 31,000 mts with shipments of 26,000 mts.

STRATEGY & OUTLOOK

The hog market has found stronger cash trade be a catalyst for higher prices. If prices near weekly resistance, producers need to hedge inventory.