NEWS

*Pending final approval by the courts, Hormel Foods will pay $2.4 million to settle a price-fixing lawsuit. Major packers were accused of conspiring together to manage supply and control prices. The settlement states this deal is not an admission of wrongdoing. Settlements were made previously with JBS and Tyson.

*CHS is reporting second-quarter net income of $170.3 million. That’s down from $292.3 million in the same quarter last year, which was a record. In the ag segment, earnings rose with stronger agronomy markets and stable grain and oilseed margins. Margins declined in CHS’ energy business due in part to a historically warm winter season.

CORN

ANALYSIS

Corn closed the week $.05 lower. Last week, private exporters announced sales of 15.0 million bushels (mb) of corn to Mexico.

In the weekly export inspections report, U.S. corn exports, for the week ended April 11, were 52.4 million bushels, little-changed from the previous week’s 56.8 mb as well as last year’s same-week exports of 48.7 mb. Corn exports have ranged tightly from 45.1-57.9 million bushels/week over the last eight weeks and averaging 51.3 million/week during the period, while being solidly better than last year’s 37.9 million/week average from mid-February through mid-April. Cumulative export inspections of 1.129 billion bushels are up 34% vs. last year’s 844 million, leaving shipments needing to average roughly 36.0 million bushels/week through the end of August to reach the USDA’s 2.100 billion bushel export projection vs. last year’s 31.1 million/week average from this point forward.

In the weekly EIA report, U.S. ethanol production, for the week ended April 12, plunged to 983,000 barrels/day from 1.056 mbpd the previous week, a much larger-than-expected decline while reflecting the lowest production in 12 weeks and the first year-over-year deficit in production in 11 weeks. It was also the first time in 11 weeks production was below the estimated weekly “needed” pace to reach the USDA’s 5.400 billion bushels annual corn for ethanol usage estimate. U.S. ethanol stocks last week declined only slightly to 26.080 million barrels from the previous week’s 26.208 million barrels and still 3.1% (33 million gallons) above year-ago same-week stocks of 1.062 billion gallons. Moreover, current stocks are still the second highest on record for mid-April, below only 2020’s 1.154 billion gallons.

The weekly crop progress report showed the corn planting at 6% complete vs. 5% average. Illinois is at 3% vs. 4% average. Iowa is at 4% vs. 2% average and Minnesota is at 3% vs. 0 average.

STRATEGY & OUTLOOK

Producers can remove storage hedges and begin to re-own previous cash sales.

SOYBEANS

Soybeans closed the week $.13 lower. Last week, private exporters announced sales of 4.5 mb of soybeans to an unknown destination and 138,000 mts of meal to the Philippines.

In the weekly export sales report, U.S. soybean export inspections last week were 15.9 mb but continuing to decline seasonally, falling from the previous week’s 18.1 mb and were the lowest in 30 weeks — the second week of the marketing year. Recent exports also continue to run below year-ago levels with last year’s same-week exports being 19.5 mb and having averaged 20.7 million bushels/week over the last four weeks vs. 23.9 million/week during the same period last year. Cumulative export inspections of 1.398 billion bushels are still down 19% from last year’s 1.715 billion vs. the USDA’s just-lowered 1.700 billion bushel export projection, reflecting an estimated 14.7% decline in exports for the year. In order to reach the USDA’s new estimate, soybean export inspections will need to average roughly 11.7 million bushels/week through the end of August vs. last year’s 10.2 million/week average from this point forward.

The monthly NOPA Crush report came in at 196.406 mb, below estimates of 197.8 mb, but well above last month’s 186.2 mb and last year’s 185.8 mb. This was a new all-time record, exceeding December 2023 195.3 mb. Soybean oil stocks came in at 1.851 bp, above estimates of 1.792 bp and last month’s 1.690 bp and identical to last year’s 1.851 bp.

In the crop progress report, U.S. soybean planting pace is at 3% vs. 1% last year. Illinois is at 4% vs. 1% average while Iowa is at 2% vs. 1% average.

STRATEGY & OUTLOOK

Producers can remove storage hedges and begin to re-own previous cash sales.

WHEAT

ANALYSIS

For the week, Chicago wheat closed $.04 1/4 lower and Kansas City wheat closed $.07 1/4 lower. Last week, Egypt purchased 120,000 mts of wheat from the Ukraine.

In the weekly export sales report, U.S. wheat export inspections last week were 20.3 mb, ticking up from the previous week’s 19.0 mb while being solidly above last year’s same-week exports of 10.2 mb. Now with only seven weeks left in the 2023-24 marketing year, wheat shipments have run quite solidly of late, averaging 19.0 million bushels/week over the last four weeks vs 11.4 million/week during the same period last year, keeping expectations to reach the USDA’s 710 million bushel export projection quite solid if not leaning toward ideas it could be slightly exceeded. In order to reach the USDA’s target, shipments would need to average roughly 13.7 million bushels/week through the end of May vs. last year’s 11.9 million/week average from this point forward. Cumulative wheat export inspections of 585 million bushels are now down only 9% vs. last year’s 644 million, after being down 18% in early February, continuing to work their way toward the USDA’s export projection, reflecting a decline of 6.5% from last year.

In the weekly crop progress and conditions report, U.S. winter wheat conditions were down 1% to 55% g/e and and spring wheat was 7% seeded.

STRATEGY & OUTLOOK

Wheat exports are not strong enough to sustain a bull market but have found support on the weekly charts.

LIVE & FEEDER CATTLE

ANALYSIS

Last week, live cattle closed $4.12 higher while feeder cattle closed $7.75 higher.

The monthly Cattle on Feed report held a few surprises, mostly a bullish placement number that was clearly in the opposite direction of the previous month’s very bearish placement figure. On feed supplies remain larger than a year ago at 11.821 million head, but slightly less than expected at 101.5% vs. estimates of 102.1%; placements, were well below estimates at 87.7% vs. estimates of 93.0% and were the lowest for March in the last four years while the industry continues to back up cattle as marketings were the lowest for March in the last nine years at 86.3% vs. estimates of 88.1%.

Last week, the North saw moderate trade volumes at $183 live and $292 dressed, which is $1 to $2 softer both live and dressed compared to last week. Moderate trade was seen in the South at $182 live, which is steady with the previous week.

Last week, the Fed Cattle Exchange offered 1,246 head for sale and 478 head of cattle sold at $182.

The latest USDA steer carcass weights were down 4 pounds from last week at 919 pounds, which is 27 pounds above year-ago levels.

The weekly export sales report has net beef sales of 17,700 MT for 2024 with exports of 16,700 MT, a marketing year high.

STRATEGY & OUTLOOK

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

LEAN HOGS

ANALYSIS

Lean hogs closed the week $2.92 higher. Iowa/southern Minnesota weekly hog weights for the week ending April 13 has weights unchanged at 288 pounds vs. 288 pounds last week and 287 pounds last year.

The weekly export sales report has net sales of 21,800 MT for 2024, a marketing year low with exports of 41,700 MT.

STRATEGY & OUTLOOK

Producers should re-establish hedges as values approach weekly chart resistance and commercials are hedging.