NEWS

*The clock is ticking for a new farm bill. American Soybean Association Executive Director of Government Affairs Christy Seyfert does not want to see this legislation pushed into next year. “We’ve been advocating for a new and improved farm bill for two years and hope that we can get there.” The farm bill extension last fall was necessary to give policy makers more time. “They have through the end of September to do that and I think there’s sincere interest in making sure that a meaningful. bipartisan farm bill can happen.”

*Gering, Nebraska, farmer George Liakos was sentenced to 36 months in prison in late October 2023. He had faced a grand jury indictment going back to October 2021 on four counts of bank fraud and one count of making a false statement. Liakos was ordered to pay restitution to First Interstate Bank. Beginning in April 2017 and continuing through May 2019, Liakos misrepresented the number of commodities he had in storage, cattle inventory, and crop acres. In addition, Liakos concealed his debt from Great Western Bank to secure approximately $11 million in loans, according to the U.S. attorney’s office in Nebraska. To obtain money from Great Western Bank, Liakos executed loans and a security agreement with the bank on June 2, 2017. The loans and security agreement consisted of a revolving line of credit, a machinery and equipment loan and a livestock loan. In approving the loans and security agreement, Great Western Bank relied on information from Liakos reflecting current commodity and livestock inventory, accounts receivable, loans and accounts payable that he knew “materially overstated his commodity inventory and materially understated and failed to report loans and accounts payable,” according to the U.S. attorney. As a result of Liakos’ scheme, Great Western Bank sustained a $3.9 million loss.

CORN

ANALYSIS

Corn closed the week $.14 lower. 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 Feb. 8, were 34.6 million bushels, up from the previous week’s 25.4 million bushels and above year-ago same-week exports of 22.2 million bushels. Corn exports have averaged 31.5 million bushels/week over the last four weeks vs. 22.9 million/week during the same period last year, allowing cumulative export inspections, now at 677 million bushels, to rise to a 31.1% year-over-year gain vs. last year’s 516 million, a new marketing year high percentage difference. If the USDA’s 2.100 billion bushel export projection is to be met, corn will need to average roughly 40.1 million bushels per week through the end of August vs. last year’s 32.7 million/week average from this point forward.

In the weekly EIA report, U.S. ethanol production, for the week ended Feb. 9, rose solidly to 1.083 million barrels/day from 1.033 million barrels per day the previous week, a larger increase than “expected” based on wire service survey indications, while rebounding to the highest production in 7 weeks and second highest of the last 29 weeks. Additionally, this week’s production was the highest on record on a same-week comparison basis. The combination of higher-than-expected ethanol production and a decent decline in weekly gasoline demand saw U.S. ethanol stocks last week rise solidly to 25.810 million barrels from 24.779 million barrels the previous week, a larger increase than “expected” based on wire service surveys while reflecting stocks 1.9% (20 million gallons) larger than year-ago stocks at this time and remain record high on a same-week comparison basis. Moreover, stocks are now back within the realm of all-time record high stocks going back to April 17, 2020.

STRATEGY & OUTLOOK

Producers should hold storage hedges in place as a low has not been confirmed. Be patient on re-owning sales.

SOYBEANS

ANALYSIS

Soybeans closed the week $.11 1/4 lower. Last week, private exporters did not announce any export sales.

In the weekly export inspections report, U.S. soybean export inspections last week were 48.7 million bushels, but down from the previous week’s 64.3 million bushels and last year’s same-week exports of 62.2 million bushels, resulting in cumulative export inspections of 1.131 MMT maintaining a 23% year-over-year decline to last year’s 1.463 billion bushels. In order to reach the USDA’s just-lowered 2023-24 export projection of 1.720 billion bushels, soybean shipments will need to average roughly 18.1 million bushels/week through the end of August vs. last year’s 15.7 million/week average from this point forward.

The monthly NOPA crush report set a new record for January at 185.78 million bushels, although this was below estimates of 189.9 million bushels and below last month’s 195.3 million bushels but ahead of last year’s 179.0 million bushels. Soybean oil stocks were estimated at 1.507 bp, above estimates of 1.409 bp and larger than last month’s 1.360 bp but considerably down from 1.829 bp last year.

STRATEGY & OUTLOOK

Producers should maintain storage hedges as a winter low has not been confirmed. Establish re-ownership with options on weekly chart support.

WHEAT

ANALYSIS

For the week, Chicago wheat closed $.36 1/4 lower and Kansas City wheat closed $.00 1/2 lower. Last week, private exporters did not announce any export sales.

In the weekly export inspections report, U.S. wheat export inspections last week were 15.0 million bushels and up modestly from the previous week’s 10.9 million bushels but below year-ago same-week exports of 17.4 million bushels. Now with only 16 week remaining in the 2023-24 marketing year, cumulative export inspections of 430 million bushels are down 18% from last year’s 525 million vs. the USDA’s 725 million bushel export projection, which they left unchanged in last week’s WASDE report, reflecting expectations for only a 4.5% decline in exports for the year. Given this, wheat export inspections will need to average roughly 16.6 million bushels/week through the end of May, solidly above last year’s 12.6 million/week 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 not strong enough to sustain a bull market.

LIVE & FEEDER CATTLE

ANALYSIS

Last week, live cattle closed $.85 higher while feeder cattle closed $2.00 higher.

Last week, moderate fed cattle cash trade in the North at $179 to $180 live and $287 dressed, which is $1 to $2 softer live and $2 lower dressed compared to last week. Active trade in the South at $180 live, which is $2 lower than last week.

Last week, the Fed Cattle Exchange offered 822 head for sale and 411 head of cattle sold at $181.50.

The latest USDA steer weights were down 3 pounds from last week at 909 pounds, which is 1 pound above year-ago levels.

The weekly export sales report has net beef sales of 16,600 mts for 2024 with shipments of 16,400 mts.

STRATEGY & OUTLOOK

Producers should re-establish window or fence strategies to protect the downside but allow for upside potential as values approach weekly resistance.