NEWS

*While a government shutdown was averted, the farm bill expired over the weekend.

Agriculture committee leadership has said the farm bill will likely be wrapped up in December. That timeline may be complicated by the next debate on government funding.

The new stopgap spending measure is in place until Nov. 17, setting up another battle over budget cuts.

CORN

ANALYSIS

Corn closed the week $.01 3/4 lower. Last week, private exporters announced sales of 16.0 million bushels (mb) of corn to Mexico.

In the weekly export inspections report, U.S. corn export inspections, for the week ended Sept. 28, were 24.6 million bushels, slipping slightly from the previous week’s 28.0 mb and falling slightly short of year-ago same-week exports of 26.9 mb.

Four full weeks into the 2023-24 marketing year, cumulative corn export inspections of 103.9 million bushels are up 11% from last year’s 93.7 million, leaving inspections needing to average roughly 35.6 million bushels/week over the remainder of the marketing year to reach the USDA’s 2.050 billion bushel export projection vs. last year’s 28.5 million bushel/week average from this point forward.

In the weekly crop progress and conditions report, U.S. national corn conditions were 53% good/excellent vs. 53% expected, 53% g/e last week and 52% last year. U.S. corn harvest moved to 23% complete vs. 25% expected, 15% last week, 19% last year and 21% average.

In the weekly Energy Information Administration (EIA) report, U.S. ethanol production for the week ending Sept. 29 was unchanged last week at 1,009k barrels per day (bpd), but well above last year’s 889k bpd. Ethanol stocks fell to 21.9 mb vs. 22.0 mb last week and slightly above last year’s 21.7 mb.

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. Hold hedges until harvest lows are made. Producers should sell into the large carries offered into the summer months.

SOYBEANS

ANALYSIS

Soybeans closed the week $.20 1/4 lower. Last week, private exporters announced sales of 14.6 mb of soybeans to China.

In the weekly export inspections report, U.S. soybean exports last week of 24.4 mb were up from the previous week’s 18.7 mb and were slightly higher than year-ago same-week exports of 22.4 mb.

Nearly one full month into the 2023-24 marketing year, U.S. soybean export inspections of 73 million bushels compare to 67 million a year ago.

Soybean exports typically begin to accelerate quickly in mid to late October as new crop supplies become available as shipments averaged 88 million bushels per week from mid-October through the end of November last year, but may be slower to pick up this year with the historically low Mississippi River water levels hampering barge movement.

In order to reach the USDA’s 1.790 billion bushel export projection, export inspections will need to average roughly 34.2 mb/week through the end of next August vs. last year’s 38.5 million/week average from this point forward.

In the weekly crop progress and conditions report, soybean conditions came in at 52% good/excellent vs. 50% expected, 50% last week, and 54% last year. Conditions improved to a four-week high. Soybean harvest is now 23% complete vs. 25% expected, 12% last week, 20% last year and 22% average.

The USDA reported U.S. soybean crush in August was 169 million bushels, below wire service-reported average expectations of 171.6 million, down sharply from 184.8 million in July and a solid 3.5% below year-ago August crush of 175.1 million bushels.

USDA reported U.S. soybean oil production in August was 2.014 billion pounds vs. 2.180 billion in July and 2.096 billion pounds last year August, while being just 4.5% above NOPA member-reported production of 1.928 billion pounds.

USDA reported end of August U.S. soybean oil stocks at 1.772 billion pounds, well below wire service-reported average expectations of 1.840 billion pounds and compared to 2.149 billion pounds at the end of July and 2.104 billion in August last year.

STRATEGY & OUTLOOK

Producers should sell the large carries offered into the summer months and re-own with futures and options.

WHEAT

ANALYSIS

For the week, Chicago wheat closed $.39 lower and Kansas City wheat closed $.49 lower. Last week, private exporters announced sales of 8.1 mb of Soft Red Winter (SRW) wheat to China.

In the weekly export inspections report, U.S. wheat exports last week were 14.6 mb, slipping from the previous week’s 17.8 mb, falling well below year-ago same-week exports of 24.5 mb and were the lowest in four weeks.

Now four months into the 2023-24 marketing year, cumulative wheat export inspections of 223 million bushels are down 29% from last year’s 313 million, leaving shipments needing to average roughly 12.6 mb/week through the end of next May to reach the USDA’s annual target vs. 11.8 million/week average from this point forward.

In the weekly crop progress and conditions report, winter wheat seedings are now 40% complete vs. 40% expected, 26% last week, 39% last year and 43% average.

STRATEGY & OUTLOOK

The job of the wheat market is to find a price level that will stimulate demand and chew through U.S. ending stocks. Wheat exports are too slow to see any type of a sustained bull market.

LIVE & FEEDER CATTLE

ANALYSIS

Last week, live cattle closed $2.80 lower while feeder cattle closed $8.67 lower.

Last week, moderate fed cattle cash trade occurred in the North at $182 to $184 live and mostly $289 dressed. This is steady to $2 softer live and $1 lower dressed compared to last week.

Moderate trade occurred in the South at $182 to $182.75 live which is steady to $1 softer than last week.

Last week, the Feed Conversion Efficiency (FCE) had 858 head offered for sale and 330 head sold at $182.75.

The latest USDA steer carcass weights came in 1 pound lower than last week at 918 pounds which is 3 pounds above year-ago levels.

The weekly export sales report has net beef sales for 2023 of 13,300 mts with shipments of 15,100 mts.

STRATEGY & OUTLOOK

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

LEAN HOGS

ANALYSIS

Lean hogs closed the week $.55 lower.

Iowa/southern Minnesota weekly hog weights for the week ending Sept. 30 has weights increasing to 281.9 pounds vs. 280.3 pounds last week and 281.0 pounds a year ago.

The weekly export sales report has net pork sales for 2023 of 43,000 mts with shipments of 28,300 mts.

STRATEGY & OUTLOOK

Producers are encouraged to re-establish hedges near weekly resistance levels.