NEWS

*Archer Daniels Midland is reporting fiscal year 2024 first-quarter earnings of $1.3 billion. That is down 24 percent from the first quarter of 2023. ADM’s Ag Services and Oilseeds segment is reporting an operating profit of $864 million during the first quarter. That’s down 29 percent from a year ago. ADM says its Ag Services sub-segment operating profit was down 33 percent from a year ago primarily due to the stabilization of trade flows leading to lower global trade.

CORN

ANALYSIS

Corn closed the week $13 1/4 lower. Last week, private exporters announced a sale of 15.9 million bushels of corn to Mexico.

In the weekly export inspections report, U.S. corn export inspections, for the week ended May 9 were 36.9 million bushels but down notably from the previous week’s 51.1 million bushels, well below last year’s same-week exports of 46.2 million bushels while being in line with the estimated 35.9 million bushels/week average pace corn export inspections will likely need to run through the end of August in order to reach the USDA’s just-raised 2.150 billion bushel export projection. Moreover, this week’s exports were the lowest in 13 weeks after running at a very consistent and quite respectable pace over the previous 11 weeks, averaging 52.6 million bushels/week during the period vs. 39.9 million/week average during the same period last year. Cumulative export inspections of 1.336 billion bushels are up 30.3% from last year’s 1.026 billion, in line with the USDA’s annual export projection reflecting an estimated 29.4% increase in exports for the year.

In the weekly EIA report, U.S. ethanol production, for the week ended May 10, rose to 1.000 million barrels/day from 965,000 barrels per day (bpd) the week prior, and is a minor 1.3% increase vs. year-ago same-week production of 987,000 bpd. This week’s production was a bit below the 1.045 mbpd average pace that will be needed through the end of August in order to reach the USDA’s just-raised 2023-24 U.S. corn for ethanol usage estimate of 5.450 billion bushels. U.S. ethanol stocks last week rose to 24.489 million barrels from 24.200 million barrels the previous week. The uptick in stocks reflected the first increase in six weeks, with stocks 55 million gallons (5.6%) above last year’s 974 million gallons following last week’s plunge in stocks dropped the year-over-year gain to only 38 million gallons (3.9%).

The weekly crop progress and conditions report saw U.S. corn planting move to 49% complete vs. 49% expected, 36% last week, 60% last year and 54% average. Iowa is 57% done with Minnesota 56%, Nebraska 55%, Illinois only 42%, Indiana 36% and Missouri 72%.

STRATEGY & OUTLOOK

Producers have established a floor with put options and put/call spread as well as making 2024 cash sales. 100% protection is advised.

SOYBEANS

ANALYSIS

Soybeans closed the week $.03 lower. Last week, private exporters announced the sale of 6.6 million bushels of soybeans to an unknown destination.

In the weekly export sales report, U.S. soybean export inspections last week of 14.9 million bushels, little-changed from the previous week’s 13.2 mb and solidly above last year’s same-week exports of 7.0 million bushels, which reflected the start of the next notable shift lower in weekly shipments which continued through the end of the marketing year, averaging just 7.5 mil bu/week over the coming nine-week period and 9.6 million/week over the final 16 weeks of the 2022-23 marketing year. Based on the USDA’s 1.700 billion bushel export projection, which was left unchanged in last Friday’s WASDE report, soybean export inspections will need to average roughly 11.2 million bushels/week through the end of August, a nearly 17% stronger pace than last year from this point forward. Cumulative export inspections of 1.453 billion bushels are now down 17.7% from last year’s 1.765 billion and continuing to lessen the year-over-year deficit with the USDA’s annual export target reflecting an expected 14.7% decline in exports for the year.

In the crop progress report, U.S. soybean planting is now 35% complete vs. 39% expected, 25% last week, 45% last year and 34% average. Iowa is only 39% done with Minnesota 26%, Nebraska 37%, Missouri 36%, Illinois 39% and Indiana 34%.

The monthly NOPA crush report saw crush at 166.034 mb, well below estimates of 183.1 mb and down from last month’s 196.4 mb and below last year’s 173.2 mb. This was the lowest April crush in three years and the second lowest of the last five years. Soybean oil stocks came in at 1.755 bp vs. estimates of 1.822 bp and last month’s 185.1 bp and last year’s 1.957 bp.

STRATEGY & OUTLOOK

Producers have established a floor with put options and put/call spread as well as making 2024 cash sales. One hundred percent protection is advised.

WHEAT

ANALYSIS

For the week, Chicago wheat closed $.11 1/4 lower and Kansas City wheat closed $.12 1/4 lower. Last week, exporters did not announce any export sales.

In the weekly export sales report, with only three full weeks remaining in the 2023-24 marketing year, U.S. wheat export inspections last week were 13.5 million bushels, little-changed from the previous week’s 12.5 million bushels and, most importantly, near the roughly 14.2 million bushels/week average that will be needed over the final few weeks of 2023-24 to reach the USDA’s 720 million bushel export projection. Cumulative export inspections of 649 million bushels are now down 5.8% from last year’s 688 million, after being down nearly 11% in early April, vs. the USDA’s export projection reflecting an estimated 5.1% decline in exports for the year.

In the weekly crop progress and conditions report, spring wheat seeding moved to 61% complete vs. 63% expected, 47% last week, 35% last year and 48% average. Minnesota is 71% done, North Dakota 49%, South Dakota 88% and Montana 63%.

Winter wheat conditions were unchanged at 50% good/excellent vs. 51% expected, 50% last week and 29% g/e last year. HRW conditions were unchanged this week while SRW conditions ticked higher. Kansas lost 1% to 31% g/e, Nebraska gained 12% to 79%, Oklahoma gained 1% to 53% and Texas lost 6% to 42% g/e. Missouri was unchanged at 82%, Illinois up 4% to 77% and Ohio up 1% to 80%. HRW heading is sharply ahead of average with Kansas at 73% vs 43% avg and Oklahoma at 95% vs 67% avg.

The Wheat Quality Council tour estimated the Kansas wheat crop at 290 million bushels, above the USDA’s 268 million bushel estimate in the May 10 crop production report and up solidly from last year’s 201 million bushel, but with the potential to be notably larger than the tour’s estimate given acreage considerations. The tour estimated the Kansas wheat yield at 46.5 bushels/acre, sharply higher than the USDA’s 38 bushel/acre estimate in last week’s crop production report and last year’s 35.0 bushels/acre. The most-recent five-year average Kansas wheat yield was 44.2 bushels/acre. The tour’s estimate implies an unusually low harvesting percentage, which notably limited the actual crop estimate from likely production based on the USDA’s harvested area ideas. Over the last eight years, the tour underestimated the Kansas yield in six years and overestimated in two years. Last year’s tour-estimated Kansas yield of 30.0 bushels/acre ended up being 5.0 bushels/acre below the state’s actual yield.

STRATEGY & OUTLOOK

Producers have established a floor with put options and put/call spread as well as making 2024 cash sales. 100% protection is advised.

LIVE & FEEDER CATTLE

ANALYSIS

Last week, live cattle closed $4.90 higher while feeder cattle closed $9.02 higher.

Last week, the North saw active trade volumes at $190 live and $300 dressed which is $3 to $4 firmer live and $4 to $5 higher dressed compared to last week. Moderate trade in the South at $186 live which is mostly $2 firmer than the previous week.

Last week, the Fed Cattle Exchange offered 974 head for sale and 0 head of cattle sold.

The latest USDA steer carcass weights were up 3 pounds from last week at 923 pounds which is 28 pounds above year-ago levels.

The weekly export sales report has net beef sales of 15,000 MT for 2024 with exports of 15,600 MT.

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 $1.65 lower. Iowa/S. Minnesota weekly hog weights for week ending May 11 has weights at 287.9 pounds vs. 288.1 pounds last week and 285.0 pounds last year.

The weekly export sales report has net sales of 21,000 MT for 2024, a marketing year low with exports of 33,200 MT.

STRATEGY & OUTLOOK

Producers should have re-established hedges as values tested weekly chart resistance and commercials were hedging.