South Dakota Senator John Thune went to the Senate floor and outlined his farm bill priorities. Thune said crop insurance is the cornerstone of the farm safety net and must be maintained. Thune has introduced legislation requiring the U.S. trade representative to develop a WTO-compliant country-of-origin labeling law for beef. “Under our current system, beef that is neither born nor raised in the United States but is simply finished here can be labeled product of the United States even if the only American thing about the beef is the plastic that it’s wrapped in,” said Thune. “That is unfair to American cattle producers and misleading to consumers.” Thune wants the new farm bill to close the labeling loophole.

CORN

ANALYSIS

Corn closed the week $.22 3/4 higher. Last week, private exporters did not announce any export sales.

In the weekly export inspections report; U.S. corn export inspections, for the week ended 7/13/23, were 14.3 million bushels, near unchanged from the previous week’s 13.8 mil bu, significantly below year ago same-week exports of 42.8 mil bu and again below the roughly 18.1 mil bu/week average that will be needed over the final seven weeks of the 2022/23 marketing year to reach the USDA’s 1.650 billion bushel export projection. Cumulative export inspections of 1.334 billion bushels are down 33% from last year’s 1.981 billion and falling, with the USDA is currently estimating this year’s exports to be down 33% from year ago levels.

In the weekly crop progress and conditions report; US corn conditions improved to 57% good/excellent vs 57% expected, 55% g/e last week and 64% last year. 47% of the crop is silking vs. 43% on average and 7% has reached the dough stage vs. 6% on average.

In the weekly EIA report; U.S. ethanol production, for the week ended 7/14/23, rose to 1.070 million barrels/day from 1.032 mbpd the week prior, with the increase from the previous week being the largest in 13 weeks and outright production for the week being the highest in 32 weeks. This week’s production was 3.5% above year ago same-week production of 1.034 mbpd, the best year-over-year comparison in 13 weeks. U.S. ethanol stocks last week rose to a 9-week high of 23.166 mil barrels, a solid increase from the previous week’s 22.658 mil barrels, reflecting the largest weekly stocks increase in four weeks. With the increase, ethanol stocks are now only a minor 16 million gallons below last year’s stocks and are the 3rd highest for mid-July of the last 14 years.

STRATEGY & OUTLOOK

On a rally into weekly resistance, producers were encouraged to liquidate any long positions and hedge the 2023 and 2024 crops as well as to buy put options to supplement sales.

SOYBEANS

ANALYSIS

Soybeans closed the week $.29 higher. Last week, private exporters did not announce any export sales.

In the weekly export inspections report; U.S. soybean exports last week were 5.7 mil bu, down from the previous week’s 5.7 mil bu, well below year ago same week exports of 16.1 mil bu and below the roughly 9.6 mil bu/week average that will be needed over the last seven weeks of 22/23 to reach the USDA’s 1.980 bil bu export projection. After the previous two weeks’ exports met the “needed” pace, this week’s exports again fell below, with soybean exports over the last six weeks averaging 7.3 mil bu/week. Cumulative export inspections of 1.833 billion bushels are down 5.3% from last year’s 1.936 billion and falling vs USDA estimating this year’s exports to be down 8.0% from last year.

In the weekly crop progress and conditions report; US soybean conditions improved 4% to 55% good/excellent vs 53% expected, 51% last week and 61% last year. 20% of the crop is setting pods vs. 17% on average with 56% blooming vs. 51% on average.

The monthly NOPA crush report for June came in at 165.023 mb, a 9 month low and well below the average estimate of 170.6 mb but still above last year’s 164.7 mb. The was below the record crush of 2022 and below the crush in May of 173.2 mb. Soybean oil stocks came in at 1.69 bp, a 7 month low and well below trade estimates of 1.816 bp and last month’s 1.957 bp. It was also down from last year’s 1.767 bp. Oil yield was the highest since May, 2022 at 11.97.

STRATEGY & OUTLOOK

On a rally into weekly resistance, producers were encouraged to liquidate any long positions and hedge the 2023 and 2024 crops as well as to buy put options to supplement sales.

WHEAT

ANALYSIS

For the week, Chicago wheat closed $.36 1/2 higher; Kansas City wheat closed $.34 1/4 higher and Minneapolis wheat $.06 higher. Last week, private exporters did not announce any export sales.

In the weekly export inspections report; U.S. wheat exports last week were 9.3 mil bu, down from the previous week’s 15.4 mil bu and below the roughly 13.4 mil bu/week average that is needed this year to reach the USDA’s 725 mil bu export projection. Wheat exports have averaged 10.4 mil bu/week through the first six weeks of 2023/24 with cumulative export inspections of 65 million bushels down 16% from last year’s 78 million vs the USDA currently estimating exports to be down 4.5% from last year.

In the weekly crop progress and conditions report; US spring wheat conditions improved more than expected to 51% good/excellent vs 47% expected, 47% last week and 71% last year. US winter wheat harvest advanced to 56% complete vs 57% expected, 46% last week, 69% last year and 69% average.

STRATEGY & OUTLOOK

Supply led rallies remain selling/hedging opportunities for inventories at major resistance levels.

LIVE & FEEDER CATTLE

ANALYSIS

Last week, live cattle closed $.50 lower while feeder cattle closed $.70 lower.

The monthly COF report came in slightly bearish compared to trade expectations. On feed supplies came in at 98.2% vs. estimates of 97.8% and above last month’s 97.1%; placements came in at 102.7%, which was well above estimates of 98.2% but it was down from last month’s placements of 104.6%. This was the second consecutive month of larger than year ago placements. Marketings were 95.0% vs. estimates 95.3% and well below last year’s 101.7%.

The bi annual cattle inventory report showed the U.S. All Cattle/Calves inventory, as of July 1, was 95.900 million head, down 2.7% from last year’s 98.600 million, with the July 1 Beef Cow Inventory of 29.400 million head down 2.6% from last year’s 30.200 million. This would be the lowest on record. The USDA reported the annual calf crop at 33.800 million head, down 1.9% from last year’s 34.465 million.

Last week, moderate fed cattle cash trade occurred in the North with the bulk at $188 live and $295 dressed, which is $2 firmer live and $5 higher dressed compared to last week. Moderate volumes traded in the South higher at $180 live, $2 firmer than the prior week.

Last week; the FCE had 1,614 head offered for sale and 268 head sold at $180.00.

The latest USDA steer carcass weights were up 8 pounds from last week at 892 pounds, which is 2 pounds above a year ago.

The weekly export sales report has net beef sales for 2023 of 20,900 mts with shipments of 16,200 mts.

STRATEGY & OUTLOOK

Producers should have window or fence strategies to protect the downside but allow for upside potential.

LEAN HOGS

ANALYSIS

Lean hogs closed the week $4.92 higher.

Iowa/S. Minnesota weekly hog weights for week ending July 15 has weights at 277.9 pounds vs. 277.8 pounds last week and 277.5 pounds last year.

The weekly export sales report has net pork sales for 2023 of 19,200 mts with shipments of 25,300 mts.

STRATEGY & OUTLOOK

Producers should re-establish hedges near weekly resistance levels.